WSJ:Euro-Zone Governments Near Deal On ESM Voting Procedures -Officials
By Matthew Dalton
Of DOW JONES NEWSWIRES
BRUSSELS(Dow Jones)--Euro-zone governments are close to reaching an agreement on voting procedures for their EUR500 billion permanent bailout fund, officials said Monday, addressing concerns from Finland about a previous deal struck in December that would allow the fund to make loans without the unanimous consent of governments.
However, some concerns remain about the deal, which would set aside capital from the fund, the European Stability Mechanism, to cover the risk of loans made without unanimous government backing. In particular, officials at the European Commission and the European Financial Stability Facility have said the proposal could lower the ESM's lending capacity, or require the fund's capital to be paid in more quickly, officials said.
Euro-zone finance ministers at their meeting Monday hope to reach a final agreement on the issue.
Euro-zone leaders at their summit in December agreed to allow the ESM to make loans based on a decision by 85% of the governments according to a "qualified majority vote," which adjusts a country's voting power according to its size. Finland has proposed to set aside ESM capital covering anywhere from 0%-10% of the value of a loan decided under this procedure, depending on the risk of the loan.
-By Matthew Dalton, Dow Jones Newswires; +32 (0)2 741 1487; matthew.dalton@dowjones.com