November 30, 2011
Launched to great fanfare a year ago, the eurozone rescue fund could soon be overtaken by events.
Eurozone finance ministers meeting in Brussels on Tuesday night agreed on another incarnation of the European Financial Stability Facility, replete with new elements aimed at making the money it can draw on go further.
However, many in financial markets have become increasingly dismissive of what only a few months ago was being hailed as the potential solution to the eurozone debt crisis.
“Yesterday’s solution” is how Gary Jenkins of Evolution Securities describes the EFSF, currently a €440bn fund backed by eurozone member states to bail out troubled countries. Has it been left behind by the rapid escalation in the crisis that has engulfed Italy and Spain and threatens to suck in “core” countries such as France and even Germany?