European Union leaders are seeking about 100 billion euros ($136 billion) in bank recapitalizations as they urge financial institutions to accept losses of between 50 percent and 60 percent on their Greek debt, said Juergen Trittin, co-leader of Germany’s opposition Greens party.
Proposals to leverage the European Financial Stability Facility to increase its firepower to more than 1 trillion euros will go to a vote in the German lower house of parliament on Oct. 26, Trittin told reporters in Berlin today after he took part in talks between Chancellor Angela Merkel and the leaders of Germany’s main political parties.
“It is clear that this leveraging will be of a size that’s greater than 1 trillion” euros, Trittin said. “It will happen on the basis of a partial insurance solution and on the basis of an inclusion of state funds or institutions such as the International Monetary Fund.”
European leaders will hold their second summit in four days on Oct. 26 after negotiations on increasing the firepower of the EFSF stalled. At their Oct. 23 summit, leaders outlined plans to aid banks and ruled out tapping the ECB’s balance sheet to boost the EFSF.
Details of the leveraging plans haven’t been completed yet, Trittin said, adding the government has promised to provide them to parliament’s budget committee by tomorrow.
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