Eurozone finance ministers agreed Thursday on how to rescue fund may invest in troubled banks, but impose so many conditions, they may not be completely successful separation of problem banks from the debt-laden country families, their goals.
Initially set up 50 billion euros bailout fund to help troubled governments, and later expanded to include banks in order to restore confidence in financial markets, debt and financial crisis three years ravaged.
Policy makers hope that this will encourage lending, so the wheels of the euro zone economy will go through a prolonged recession began to move again.
Allow rescue fund to buy bank stocks and a decision by the crisis in June 2012 height - Spanish banks need billions of euros in Madrid and the cost of borrowing is quickly climbing, it was cut out to improve the prospects for the market.
ECB unlimited commitment to buy government bonds to support the euro, if necessary, to appease the market since then.
This calm, Germany and other countries opened the way, put the brakes on sweeping banking reforms, German Finance Minister Wolfgang Schaeuble fear will eventually leave Germany hook on someone else's problem too.
In Thursday's trading goes some distance apart of problem banks from their government, but less than expected nine months or a year ago, when leaders have called for a clear "break" between banks and sovereign states of the negative cycle.
Will sell its financial crisis in government bonds Bank in its country. Then the bank will hold a large amount of their government's debt, a shaky government and fragile banks established between a negative feedback loop.
"This instrument will help maintain the stability of the euro area financial sector spread to the sovereignty and remove the risk of weakening the banks and the vicious circle between sovereign nations", Jeroen Dijsselbloem chairman of eurozone finance ministers told a news conference .
German Finance Minister Schaeuble put it more bluntly.
"We must avoid false expectations, and direct bank recapitalization Who thought I could go to any bank needs capital (bailout fund), which is nonsense," he told reporters after the meeting.
Relief fund will be able to purchase up to one billion euros to spend 60 Chinese banks, whose main purpose is to lower risk of government loans to keep its firepower, but if necessary, the limit may be increased.
Governments, the creditor will help
Ministers also agreed that the country's troubled banks will contribute to the rescue.
A government would first have to recapitalize banks, to ensure compliance with minimum common equity Tier 1 capital ratio was 4.5%, before the bailout fund could become shareholders.
If banks have to meet the minimum ratio, the government will provide the necessary capital injections along the relief fund 80% to 20% during the first two years of the entry into force of the law, in 2014 autumn.
Two years later, the government's contribution to the necessary capital increase will drop to 10%.
Further undermine confidence in the effect of enhancement packages before assuming bailout fund invested in bank, its shareholders, bondholders and the possibility of even large depositors may be asked to contribute.
"An appropriate level of bail will be applied (rescue fund), in line with EU state aid rules and apply the principle of upcoming bank recovery and resolution directive," Dijsselbloem said before bank recapitalization.
EU state aid law foreseen only for the loss of shareholders and junior bondholders, but still not finalized Directive senior bondholders and the large depositors could also take a hit.
Last Thursday's debate is separate, but closely linked to the talks on Friday, when eurozone ministers will participate colleagues from other EU countries, the instruction to save or close the bankrupt bank.
Relief fund guidelines only legal form once the European Parliament voted through the instruction is completed.
Ministers also decided to rescue fund will be able to become a shareholder in the bank in trouble before the 2014 autumn - EU policymakers called for retroactivity.
A case by case decision may qualify for such retroactive to help banks will Dijsselbloem said.
Ireland (Other OTC: IRLD's - News) are interested in its bank rescue fund shares may be Greece, Cyprus and Portugal. Spain says it will not seek such an option, so it will not send a signal, the sovereign can not cope with their own market.
German Finance Minister Schaeuble hinted, Dublin, can be considered.
"We have told our Irish friend does not exclude use of the ultimate retrospective, based on a case by case basis," he said.
 
 



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