Eurogroup launches permanent rescue fund

The 17-member Eurogroup Monday launched the European Stability Mechanism (ESM) which is a permanent fund set up to provide financial assistance to eurozone member states facing economic crisis. "The start of the European Stability Mechanism marks an historic milestone in shaping the future of the European monetary Union. The Euro area now is equipped with the effective firewall which of course is a crucial component of our strategy to ensure financial stability in the Union," the president of the Eurogroup, Jean-Calude Juncker, told a press conference in Luxembourg this evening. The ESM board of governors held its inaugural meeting today in Luxembourg where the fund is bsed. Klaus Regling, Managing Director of the ESM, told the joint press conference that "as of today the ESM is fully operational with lending capacity of 200 billion euro that will grow in the next 18 months". The initial maximum lending capacity of the ESM is set at 500 billion euro.