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Brussels blog by some wire service journalists

Eurozone weighs more powers for bailout fund

By GABRIELE STEINHAUSER

BRUSSELS (AP) — Eurozone finance ministers opened the door to using the currency union’s bailout fund to buy up distressed Greek bonds, thereby cutting the country’s overall debt load as they scrambled to stop the region’s debt crisis from spreading to larger economies like Italy and Spain.

The ministers’ statement Monday — which came after hours of discussions and was scant on details — followed one of the worst days in the markets for Italy and Spain, the third and fourth largest economies in the eurozone. The fear is that while Europe’s euro750 billion bailout fund can support already bailed out Greece, Portugal and Ireland — only 6 percent of the eurozone economy — unemployment-ridden Spain and highly indebted Italy are too big to save.

The 17 eurozone finance ministers said they “stand ready” to contain the risk of contagion, “including enhancing the flexibility and the scope” of the European Financial Stability Facility, the eurozone’s portion of the overall bailout fund, also known as the EFSF. They also said that they will consider giving already bailed out countries more time to repay their loans and cutting the interest rates they have to pay.

Eurozone

 

 

READ THE FULL STORY HERE.

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