The European Union is weighing whether a 50 billion-euro ($68 billion) rescue fund can be turned into a bank backstop for member states outside the single-currency bloc, two EU officials said.
The EU’s balance-of-payments fund currently has about 40 billion euros available, after being used to help Latvia, Hungary and Romania, the officials said. The European Commission now wants to overhaul the fund and add a tool for bank aid that could be tapped by non-euro countries whose lenders fail next year’s continent-wide stress tests, they said on condition of anonymity because the talks are private.
The Brussels-based commission wants a resource that can operate alongside the euro area’s 500 billion-euro firewall, so that the entire 28-nation EU is braced for the results of next year’s stress tests, the officials said. The goal is to reach a deal by the end of this year so that the tool can be ready by mid-2014, when the commission also hopes to have finished negotiations on when the firewall can provide direct aid to euro-zone banks.
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