Bail-out fund stands by for first big test

Ever since the European Union set up a temporary bail-out fund after the Greek crisis in June 2010, Klaus Regling, the German economist who heads the European Financial Stability Facility, has said he believed the system will never be used.

With Ireland’s ability to borrow at sustainable rates being undermined by the day as Irish bond prices plummet alongside other 'peripheral' eurozone countries, Mr Regling may be proved wrong faster than anyone anticipated.

If that happens, the EU will receive a quick lesson in whether the new structures and systems it set up to deal with another Greek-like crisis are up to the job.

PressEurop, 12.11.10: All hope lost on the good ship Euro? http://www.presseurop.eu/en/content/article/387841-all-hope-lost-good-ship-euro

ESO: Background information: Eurozone needs a permanent bail-out fund http://www.europeansources.info/record/eurozone-needs-a-permanent-bail-out-fund/

ESO: Background information: European Financial Stability Facility (EFSF) http://www.europeansources.info/record/website-european-financial-stability-facility-efsf/

ESO: Background information: Barroso reaffirms offer of help to Ireland http://www.europeansources.info/record/barroso-reaffirms-offer-of-help-to-ireland/

EUObserver, 12.11.10: Eurozone finance ministers gird themselves as Irish situation deteriorates http://euobserver.com/9/31258

---