Oct. 14 (Bloomberg) -- The European Financial Stability Facility might be allowed to guarantee as much as 30 percent of new bond sales by a distressed euro-area government as part of fresh plans to stem the debt crisis, said a person familiar with the matter.
Possible EFSF authority to guarantee a portion of new national debt sales in the euro area is likely to cover at least 20 percent, the European official said today in Brussels on the condition of anonymity.
As European leaders prepare for a crisis meeting on Oct. 23, they are debating how best to equip the 440 billion-euro ($607 billion) EFSF for its new powers to intervene in the primary and secondary markets for sovereign bonds, to offer credit lines to governments and to recapitalize banks. The EFSF’s role so far has been to sell bonds to finance rescue loans.
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