Dáil Éireann Debate, Tuesday - 22 May 2012
220 Deputy Micheál Martin asked the Minister for Finance if he will make a statement on the recent request from the OECD for the extension of Europe’s firewall beyond the €700 billion acceptable to Germany. [19798/12]
View answerOn 27 March 2012 while presenting the OECD's Economic Surveys of the Euro Area and the European Union in Brussels, OECD Secretary-General Angel Gurría said the Euro Area Finance Ministers meeting, taking place that week, needed to boost the firepower of the European stability funds to at least one trillion euros. He said that a credible financial firewall would provide governments with the breathing space they needed to focus crucially on revitalising Europe's economic growth and competitiveness. In order to further improve market confidence and in accordance with the agreement reached at the Euro Area Heads of State or Government (HoSG) meeting on 9 December 2011 and reiterated on 2 March 2012, the HoSG have reassessed the adequacy of the overall EFSF/ESM lending ceiling of €500 billion.
The Eurogroup concluded its review of the ESM capacity on 30 March and agreed in principle the following:
That the ESM will be the main instrument to finance new programmes as from July 2012. The EFSF will, as a rule, only remain active in financing programmes that have started before that date. For a transitional period until mid-2013, it may engage in new programmes in order to ensure a full fresh lending capacity of €500 billion.
The current overall ceiling for ESM/EFSF lending, as defined in the ESM Treaty, will be raised to €700 billion such that the ESM and the EFSF will be able to operate, if needed, as described above. As of mid-2013, the maximum lending volume of ESM will be €500 billion. The combined lending ceiling of the ESM and the EFSF will continue to be set at €700 billion.
In addition €49 billion out of the EFSM and €53 billion out of the bilateral Greek loan facility have already been paid out to support current programme countries. All together the euro area is mobilising an overall firewall of approximately €800 billion, equivalent to over $1 trillion. On 2 April, OECD Secretary-General Angel Gurría welcomed the measures announced by Eurogroup Finance Ministers meeting in Copenhagen to protect the euro area economies.
