Europe to lend IMF €200 bln to fight crisisDecember 9, 2011 - 10:39 AMT PanARMENIAN.Net - Euro zone countries brought forward by one year to next July the launch of a permanent bailout fund and agreed, along with other EU states, to consider lending up to 200 billion euros to the IMF to help it fight the sovereign debt crisis. But leaders of the 17-country euro zone decided the European Stability Mechanism (ESM) fund, which will have an effective lending capacity of 500 billion euros, would not get a banking licence as suggested by France. Such a license would have allowed the ESM to refinance itself at the European Central Bank's liquidity operations and give it enormous firepower, but it would also break EU law which forbids the ECB from financing government deficits. "We... agreed on the acceleration of the entry into force of the ESM rescue fund. It should enter into force in July 2012," the chairman of the leaders' summit, Herman Van Rompuy, told a news conference early on Friday after a night of talks. The ESM is to replace the temporary fund, the 440-billion- euro European Financial Stability Facility (EFSF), that leaders decided should be leveraged through a partial insurance scheme and co-investment funds and quickly deployed. The ECB will act as an agent for the EFSF and ESM in market operations. The two funds will run in parallel between mid-2012 and mid-2013 and the leaders will assess in March 2012 if they need to change an earlier agreement to keep the combined lending capacity of both at no more than 500 billion euros. Euro zone leaders agreed earlier this year that the ESM would have paid-in capital of 80 billion euros and callable capital of 620 billion euros. They had decided that the paid-in capital would be provided gradually over five years, according to Financial Mirror. Top stories Yerevan has dismissed Turkey’s demand to shut down the Armenian nuclear power plant as “inappropriate”. Armenia will loan 2.9 billion drams to Nagorno Karabakh (Artsakh), according to a draft government decision. The Ministry of Ecology and Natural Resources of Azerbaijan has “strongly condemned” Armenia’s decision. Kerobyan has said that for the first time in the history of Armenia, the volume of foreign direct investments amounted to about $1 billion. Partner news | Armenia votes for UN resolution granting Palestine new rights The U.N. General Assembly voted by a wide margin on May 11 to grant new “rights and privileges” to Palestine. Second round of Armenia-Azerbaijan talks set for May 11 The second round of negotiations between the foreign ministers of Armenia and Azerbaijan will take place on May 11. About 32,000 rally in Yerevan to deman Pashinyan’s resignation About 31,700 people attended an opposition rally on Thursday, May 9 in Yerevan demanding the resignation of Prime Minister Nikol Pashinyan. Armenian, Azerbaijani Foreign Minister to meet in Almaty Armenian Foreign Minister Ararat Mirzoyan and his Azerbaijani counterpart Jeyhun Bayramov will meet in Almaty. |