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permanent bailout fund the Eurozone

Eurozone ministers yesterday reached agreement on the contributions of each member state permanent future bailout fund, which will force since 2013 and to which Spain will contribute 11.9%. This fund will have a capacity of 500,000 million financing to help countries with solvency problems, but this will require a total capital of 700,000 million, explained the President of the Eurogroup, Jean Claude Juncker.

Of this amount, 80,000 million will be contributed as capital paid (half of them in 2013 and the other in the next three years) to 620,000 million will be mobilized in the form of capital and guarantees. According to these figures, Spain will contribute 9.523 million in capital invested, half of them in 2013 and 73.804 million as other capital mobilized and guarantees, to add 83.328 million euros. At the end of the meeting, Finance Minister, Elena Salgado welcomed the fact that the English contribution will not count as debt.

rescue fund in the Eurozone was created in May last year as a temporary measure to prevent the spread of the Greek crisis to other countries, with an initial budget of 440,000 million which, together with the contribution of the European Commission International Monetary Fund (IMF), total 750,000 million.

However, the EU decided to make permanent this temporary measure to prevent future crises and to provide the future fund with 500,000 million financing capacity. Juncker said that the future permanent fund will be based in Luxembourg and will be governed by a board of governors composed of the finance ministers of the Eurozone, advised by the Commissioner for Economic and Monetary Affairs and the European Central Bank president. The bailout fund future sovereign debt can buy but only in the primary market and not in the secondary market, contrary to the intention of the ECB.

finance ministers of the Eurozone left for later the rescue fund reform in force. Salgado bid to increase the capacity of the current fund by increasing the guarantees, but Germany requested capital injections part less creditworthy countries, including Spain. The English contribution to the current bailout fund also rises to 11.9%, equivalent to 52.352 million in guarantees.

Meanwhile, Spain is improving its relationship with the markets. The risk premium fell below 200 basis points and Russia authorized the National Welfare Fund to invest some of its 95,000 million euros in English debt, and amending its decision of November 2010, when it excluded to Spain the list of countries whose debt may be gained.