ESM to be boosted to 2 trillion euros for emergencies

Eurozone countries plan to boost the size of their rescue fund for indebted countries to two trillion euros (about $2.6 trillion) to be ready for emergencies, a German media report said Sunday. The current target for the European Stability Mechanism is 500 billion euros, but eurozone countries want to prepare for contingencies in large economies such as Spain and Italy, said the weekly Der Spiegel. It should be modelled on the European Financial Stability Facility set up in the spring of 2010 in response to the Greek sovereign debt crisis, said the report, which cited no sources. However, the proposal has run into opposition from Finland, which blocked its early adoption within the Eurogroup and would want such a change to be approved by its national parliament, Der Spiegel said. The ESM, with capital of 80 billion euros, will come into force next year as a "firewall" and lender of last resort to indebted states and banks.