Oct. 24 (Bloomberg) -- The extent to which the euro region’s bailout fund can be leveraged can only be ascertained after discussions with investors and rating companies, a draft European Union document said.
European officials are discussing two options to maximize the impact of its bailout fund, policy makers have said. The first involves guaranteeing government bond sales. The second sets up a fund that would seek outside investment in troubled bonds.
“The capacity increase in both options is achieved by combining public and private resources in order to attain financing for Member States at sustainable prices,” said the document, which was obtained by Bloomberg News. “The leverage which can be achieved can only be determined after dialogue with investors and rating agencies around the new instrument, and in the light of prevailing investor appetite over time for the sovereign bonds of particular Member States.”
The document was distributed to German lawmakers.
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