Italy wants rescue fund 'doubled'

Italian Prime Minister Mario Monti is pushing to double the size of Europe's permanent bailout fund to one billion euros ($1.3 billion), a German media report to be published on Monday said. News weekly Der Spiegel said Monti wanted the planned 500-billion-euro European Stability Mechanism (ESM), which is scheduled to replace the European Financial Stability Facility (EFSF) in July, to have twice the firepower to help stricken states. Der Spiegel, which did not cite its sources, said Monti argued that such a move would reassure markets while driving down borrowing costs for the debt-wracked countries of the eurozone. "He has also informed the German government of his aims," it said. Spiegel added that Monti had won backing for the proposal from European Central Bank President Mario Draghi, who it said proposed using unused money from the EFSF to boost the size of the new fund to about 750 billion euros. A spokesman for Chancellor Angela Merkel on Friday again ruled out Berlin, the eurozone's paymaster, boosting its contributions to the European bailout funds. "We have no doubt that the EFSF, for example, has the means necessary to fulfil its current obligations," Seibert told a regular news conference. "If the ESM is brought forward, in the summer of this year, it will be another fund with another capital structure and that will also of course be in a position to fulfil the necessary tasks." Meanwhile Finance Minister Wolfgang Schaeuble told the weekly Frankfurter Allgemeine Sonntagszeitung that he was pleased with progress on the European Union's rescue efforts, ahead of a crunch summit on January 30. "If you look at the first weeks of the year, the confidence of market participants seems to be slowly returning," he said. "The eurozone states have taken the right and important steps on a new path in recent months. "The ESM is being brought forward, leaders have agreed on the outlines of a fiscal pact which paves the way toward a stability union and the countries in the sights of the markets have decisively taken on the necessary budget consolidation and important reforms. Now they just need to continue down that path."