The details of how the European Financial Stability Facility (EFSF) will function are starting to emerge ahead of the finance ministers meetings in Brussels that start on Tuesday.

According to news reports a draft of the guidelines shows that the EFSF might insure the bonds of troubled countries with guarantees of between 20 to 30 percent of each issue. This insurance is expected to be in the form of a partial protection security which is also tradable and to be issued by an independent special purpose vehicle (SPV).

According to this draft proposal to ensure 30% of the bond issues that is circulated to policy makers, the 440 billion euro firepower of the EFSF will create a threefold expansion.