OECD stresses need to raise eurozone bailout fund to 1 trillion euros | Tucson Post

OECD stresses need to raise eurozone bailout fund to 1 trillion euros

Tucson Post Tuesday 27th March, 2012

• Larger rescue fund would give eurozone governments more room to concentrate on restoring growth, says OECD report.

• Eurozone finance ministers due to meet later this week to discuss combining existing rescue funds

• OECD report underlines the need for ambitious economic reforms

BRUSSELS - Eurozone bailout funds need to be increased substantially to at least euros 1 trillion (pounds 836.3 billion), the head of the Organisation for Economic Cooperation and Development (OECD) has stressed.

The current euros 440 billion European Financial Stability Facility (EFSF) is not large enough to restore market confidence, said Angel Gurra, secretary general of the international economic think tank presenting its latest report here Tuesday.

Claiming that a larger rescue fund would give eurozone governments more room to concentrate on restoring growth and competitiveness to the region, Gurria said, "The mother of all firewalls should be in place, strong enough, broad enough, deep enough, tall enough, just big."

The OECD has warned that the region's banks remain weak. With debt levels still rising and governments' fiscal targets far from assured, Gurria said Eurozone finance ministers need to impress the financial markets with the size of their rescue fund for indebted countries when they meet later this week.

The temporary EFSF is due to expire in June 2013.

At their meeting eurozone finance ministers are expected to agree on combining the two rescue funds for the 17 euro currency nations the European Financial Stability Facility (EFSF) with its permanent European Stability Mechanism (ESM).

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