Factbox - Plans to strengthen euro zone bailout fund ESM
LUXEMBOURG (Reuters) - Euro zone finance ministers and leaders will seek agreement in the next eight days on a series of reforms to make the currency area more resilient to future crises.
Below are ideas for new powers for the European Stability Mechanism (ESM), the euro zone bailout fund for states with a firepower of 500 billion euros (438.5 billion pounds), discussed by finance ministers and to be considered by a European Union summit on June 29.
They are based on an agreement between France and Germany, which lead the way on the changes, as well as the European Commission and eight northern European finance ministers.
As part of the overhaul the ESM's name may be changed.
NEW POWERS UNDER CONSIDERATION
- design potential future bailout programmes for euro zone countries
- monitor economies of all euro zone countries and provide funds to troubled states before they need a full bailout
- help negotiate debt restructuring between sovereign borrowers and bond holders
- extend precautionary credit lines, with no strings attached, to countries that do not break any EU fiscal rules
- back up the euro zone's single resolution fund with loans for banks if it runs out of cash during a major banking crisis.
(Reporting by Jan Strupczewski; editing by David Stamp)
