European finance ministers meet in Brussels today under heightened market jitters and volatility as the finance chiefs negotiate the need and the prospects for expanded the May adopted bailout package, the EU-IMF stability fund as Belgium argues the €750 billion package needs expansion!
On Saturday, Didier Reynders the Belgian Finance Minister said that the fund might be expanded shall ministers agree on introducing a larger permanent facility when this temporary facility expires.
The fear of contagion in the market undermined the €85 billion bailout for Ireland, where markets see that the contagion is still spreading with Portugal and Spain under heightened risk of being next. The market sees the stability fund now insufficient to contain the damage or help bailout more nations, especially if Spain indeed needs assistance. Trichet already signaled that finance ministers must consider the option, and Axel Weber also noted it as a possibility despite earlier reluctance from Sarkozy and Merkel last month.
The European officials will meet today at 5:00 PM in Brussels with much on the line to debate. Reuters reported yesterday citing an IMF report, that the IMF will ask the EU to expand the rescue package for nations strapped with liquidity and finances.
We see high possibility for such a decision to be made, or at least clear pledges to do so, where before such a move would have aggravated markets but now it is needed to stabilize jittery markets.