The euro zone is not discussing making changes to the European Financial Stability Facility (EFSF) or the scope of its operations, including purchases of bonds, euro zone sources said today.
The Financial Times reported that European officials were considering plans to overhaul the EU's portion of the €750-billion EU/IMF-backed fund and use it to buy the sovereign bonds of distressed governments.
"This is not being seriously considered," one senior euro zone source said.
Such a step would make it easier to aid debt-laden countries without resorting to fully-fledged bailouts, the newspaper said, citing people involved with the deliberations.
"There are no changes to the EFSF or its remit under discussion," a second senior euro zone source said.
Only the European Central Bank has so far purchased bonds of embattled peripheral euro zone countries such as Ireland and Portugal to lower their borrowing costs, a move that proved controversial even within the bank itself.
The FT also reported that the EFSF, which is set to be replaced by a permanent fund in 2013, could be modified to provide short-term credit to countries struggling to borrow on the market but not in need of a multi-year bailout package.
European Union leaders will agree this week to insert two sentences into the EU treaty to pave the way for the creation of the European Stability Mechanism from 2013, draft conclusions of the summit showed on Saturday.
Reuters
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