European govts 'planning to boost rescue fund'

29 March 2012

Governments across Europe may look to provide the continent with extra protection against its debt crisis by boosting their collective rescue aid budget for the next year.

That is according to a statement written for finance ministers in the region, which indicated that a further €940 billion ($1.3 trillion) could be required in order to prevent the ongoing debt crisis from escalating, Bloomberg reports.

European policymakers are scheduled to meet in Copenhagen tomorrow (30 March) and appear set to run the European Stability Mechanism - a scheme worth around €500 billion - with the temporary instalment of €200 billion already agreed.

Furthermore, it is now expected they will also permit the unused sum of €240 billion to be used until halfway through next year should any "exceptional circumstances" arise in the interim period.

However, Jens Weidmann, head of the German Bundesbank, has warned that simply increasing the fund will not solve the problem.

By Gary Cooper

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