Rescue row looms as ESM fund launched
The eurozone's permanent €500bn bailout fund will be formally launched today in Luxembourg.
It is being set up in a bid to beef up Europe's defences against the debt crisis that is now threatening Spain.
The European Stability Mechanism (ESM) will be a permanent fund, able to lend to eurozone countries and banks in trouble -- however, details of just how banks can access the rescue loans remain up in the air.
The scene is set for a tense round of discussions today between countries, including Germany, that want to restrict use of the fund for banking rescues, and those, including France and Ireland, pushing for greater flexibility. The issues have major implications for Ireland, which hopes to use ESM money to shift some of the €64bn cost of rescuing banks here onto the new institution.
Eurozone finance ministers, who form the ESM's board of governors, will hold an inaugural meeting of the fund today.