The European Commission is proposing to give a 7 billion euro ($7.7 billion) bridge loan to Greece to cover the country's financing needs in July using the
European Financial Stability Mechanism (EFSM), according to document from the EU executive.
On 9 October, the Ecofin Council also green-lighted a 2 billionaEFSM (
European Financial Stability Mechanism) disbursement.
Another alternative described in the paper was using 12 billion euros left over from the
European Financial Stability Mechanism (EFSM) - after bailing out Greece, Ireland and Portugal - as leverage to raise up to 200 billion euros from the private sector.
Under the terms of a deal signed by Mr Osborne's predecessor Alistair Darling in the dying days of the Labour government, Britain is committed to contributing a share of any bail-out provided before 2013 under the
European Financial Stability Mechanism (EFSM).
There were strong objections from both Britain and the Czech Republic -- EU countries that do not use the euro -- to proposals to provide a e1/47bn loan from the
European Financial Stability Mechanism (EFSM), an EU-wide fund not intended for euro zone funding needs.
Spain is the first country to tap the special credit line for banks provided for under the existing
European Financial Stability Mechanism (EFSF), as well as under Article 15 of the ESM treaty.
The premium will be applied to EUR22.5billion of the loans which we will receive from the
European Financial Stability Mechanism.
The options include bilateral loans to Greece, the disbursement of profits made by the ECB on Greek bonds it bought during the crisis, and making use of the funds still available in a mini-bailout fund set up in 2010 -- the
European Financial Stability Mechanism (EFSM).
Two funds: the eurozone government-backed European Financial Stability Facility (440 billion euro) and the
European Financial Stability Mechanism (60 billion euro), backed by the EU budget.
The IMF will act as a guarantor for EUR22.5billion, while the remaining EUR45billion is split equally between the European Financial Stability Fund and
European Financial Stability Mechanism - within this is are loans from the UK, Sweden and Denmark.
The EU currently has two temporary rescue funds - the EU-budget backed
European Financial Stability Mechanism (EFSM), with 12 billion out of 60 billion remaining after Ireland's and Portugal's bailouts, and the European Financial Stability Facility (EFSF), backed by eurozone guarantees and with an estimated 250 billion left (the EFSF is also contributing to the second Greek bailout).
Finance ministers agreed on Tuesday night on detailed plans to leverage the
European Financial Stability Mechanism (EFSF), but could not say by how much because of rapidly worsening market conditions, prompting them to look to the IMF.
