European Stability Mechanism (ESM), to finance the euro-area countries in difficulty should become operational in October, said yesterday Director European Financial Stability Fund (EFSF), Klaus Regling German.
At $ 500 billion, this mechanism, which will replace the EFSF, will be able to directly recapitalize banks and buy bonds on the secondary market. Initially, the ESM should have come into effect in July, but the law has not yet been ratified by large countries such as Germany, Italy and Spain.
In Germany, the Constitutional Court must vote on the issue on 12 September, following several complaints, especially from the radical left.
The decision may determine, according to some analysts, quoted by Mediafax, or survival of the single currency, while the ESM can not be deprived of its main contributor, Germany.
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