Oct. 20 (Bloomberg) -- European Commission President Jose Barroso expressed optimism that euro-area leaders will reach agreement this weekend on leveraging their temporary rescue fund to help fight the debt crisis.
Government heads from the 17-nation euro area are due to meet in Brussels on Oct. 23 to seek ways to enhance the effectiveness of the 440 billion-euro ($604 billion) European Financial Stability Facility. The AAA rated EFSF was established last year to sell bonds to finance rescue loans for distressed euro nations.
The leaders decided earlier this year to expand the role of the EFSF by giving it the power to buy sovereign bonds on the primary and secondary markets, offer credit lines to governments and recapitalize banks. As the Greece-triggered debt crisis has continued to spread, the focus has shifted to how to get the most out of the EFSF’s resources.
“We have been proposing the leveraging of the EFSF,” Barroso told a conference today in Brussels. “I hope this will be agreed on Sunday. I am encouraged by the work going on. I think a very positive outcome on Sunday is possible provided there is political will and a sense of compromise from all participants.”
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