BRUSSELS (Reuters) - The euro zone bailout fund, the European Financial Stability Facility (EFSF), is to get new powers to buy bonds of distressed states on the secondary market, grant precautionary credit and recapitalise banks.
This new operational flexibility will have to be approved by parliaments in several euro zone countries. Euro zone officials hope this will happen by the end of the year at the latest.
Below are planned approval times for the changed EFSF framework agreement in some euro zone countries.
Parliamentary approval is needed and the government is likely to get it in September.
Government approval is enough in France. The fiscal consequences of it then get folded into the budget law which is voted on in parliament as normal and should be easily passed. The French will present a revised budget to parliament in early September incorporating additional debt due to their guarantees of the EFSF.
The EU deal on higher EFSF financial capacity is already binding in Italy, while the Treasury is reviewing the deal of July 21 to understand if a new regulation is needed to put the new framework into force. If new regulation is needed it will be done quite quickly, Italian government sources said.
The EFSF framework will go to parliament, but the government can approve it earlier and it is unlikely to face problems.
Luxembourg’s parliament is set to approve the new EFSF agreement in October.
The EFSF framework agreement will have to be approved by parliament. One of the four parties forming the ruling coalition, the Freedom and Solidarity party, is against the bigger and more flexible EFSF, but the government may get additional backing from the opposition on the issue.
Parliament is expected to vote on the EFSF agreement in the last quarter of the year. The task might be problematic because the government lost its majority in parliament in May, but the government is likely to get sufficient support with the help of independent MPs and the opposition. It could become more difficult if other countries block the EFSF amendments earlier or if Slovenia holds early elections at the end of this year.
The EFSF agreement will have to be approved by the parliament, but is likely to pass since the government has a parliamentary majority.
The Irish parliament will have to pass the EFSF framework. No referendum is necessary.
Reporting by Jan Strupczewski, editing by Catherine Evans