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Will ESM recapitalize banks directly?

According EU Economics and Monetary Affairs Commissioner Olli Rehn, Еurozone finance ministers are expected to agree the rules governing how the European Stability Mechanism could directly recapitalize struggling banks on a today’s meeting in Luxembourg.

Allowing the ESM to recapitalize banks directly could be a powerful tool in ending the region's three year recession by breaking the link between banks and government institutions, Rehn says. The fund could house 50 to 70 bln euros which would be available for direct recapitalization as early as autumn of 2014 if the Eurogroup is able to reach an agreement.

ESM's direct recapitalization tools could be the first step of creating a united banking system across the eurozone.

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