EFSF Bundestag package may take weeks to fund

The Irish Times, always a good source for news from within the Euro Group of countries has the following points on the package just passed in the German Lower Parliament:

EURO ZONE governments have warned it could take weeks to finalise the means to give their debt-crisis rescue fund the firepower it needs to protect countries such as Italy and Spain from speculative attacks.

The draft of the terms for the “optimisation” of the European financial stability facility (EFSF) submitted to the German parliament states that the fund would choose between two tools on a case-by-case basis.

To multiply the impact of remaining resources – €250 billion out of the original €440 billion, following bailouts of Greece, Ireland and Portugal – the EFSF could insure portions of new sovereign bond issues. It could also tap a special fund fed by global private and public investors.

But the governments warn that winning investors for the latter special purpose investment vehicle, or SPIV, could “require a period of some weeks”, should EU leaders give the proposal the green light at their summit today.

Italy still seems to be confused over the nature of the package they will present to their EU fellow-members later today, while reports now abound that the Netherlands will be unlikely to get its parliament to approve whatever package eventually emerges.