Bloomberg News

Estonia Opposes Boosting Euro Bailout Fund, Premier Ansip Says

October 20, 2011

Oct. 20 (Bloomberg) -- Estonia opposes further increasing the size of Europe’s temporary rescue fund and wants the “maximum” involvement of private companies in recapitalizing banks, Prime Minister Andrus Ansip said.

Estonia expects private companies to bear the brunt of costs of any bank recapitalization, followed by the involved member states with Europe-wide measures as a backstop, Ansip told a news conference today in the capital, Tallinn.

European leaders, who will meet at an Oct. 23 summit, are seeking ways to maximize the firepower of the 440 billion-euro ($608 billion) European Financial Stability Facility as the region’s debt crisis threatens Italy and Spain. One mode being discussed allows Europe to boost the fund’s scope by using it to insure only a portion of national bond sales.

“Estonia’s position unambiguously states that we don’t agree with increasing the size of the” fund’s “guarantees, while we do agree to leveraging its funds,” Ansip said. “I’m convinced that the readiness of the majority of eurozone member states to give additional guarantees has by now been depleted.”

A majority of Estonians oppose the country’s involvement in the bailout fund, which has channeled aid to Ireland and Portugal, according to a poll published by Tallinn-based research company Turu-Uuringute AS on Oct. 13. Fifty-eight percent of respondents said the country, which adopted the euro this year, shouldn’t guarantee EFSF loans, it said.

Ansip repeated that Estonia backs launching the region’s permanent rescue fund, European Stability Mechanism, in July 2012, a year before schedule.

--Editors: Balazs Penz, Jeffrey Donovan

To contact the reporter on this story: Ott Ummelas in Tallinn at oummelas@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net


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