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Bowles: EFSF should be increased to €2tn

Friday 22 July 2011 - by Jacqui Street

The European Parliament's Economics and Monetary Affairs Committee chair Sharon Bowles has called for a further increase in Europe's bail out facility following the latest agreement by eurozone leaders.

While broadly supportive of the package to support Greece and expand the scope of the European Financial Stability Facility, Bowles says the EFSF should be increased.

In a letter to European Commission economic and monetary affairs commissioner Olli Rehn, she writes: "The facility will need to be much larger. I have previously said €2tn; some other commentators have now worked up to €1tn."

Bowles also wants the EFSF to be consistent when applying its new powers.

"The decision to allow the European Financial Stability Facility to purchase in the secondary market is welcome. Again I have been calling for this for some time. However, it must be clear that the conditionality and basis of decisions must not be discriminatory or improperly tie into other matters."

Bowles said she is "hugely pleased" at the extension of the loan maturity and reduction of interest rates for Greece.

"At last wisdom has broken out and it is a triumph that these terms are also extended to Ireland and Portugal."

The package to bail out Greece, drawn up on Thursday at an emergency summit of eurozone leaders, is worth €109bn ($155bn).

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