The effective lending capacity of the euro zone's financial rescue fund should be reinforced and the scope of its activity widened, the European Union's economic chief said on Wednesday.
We need to review all options for the size and scope of our financial backstops -- not only for the current ones but also for the permanent European stability mechanism too, EU Monetary Affairs Commissioner Olli Rehn wrote in guest column for the Financial Times.
Euro zone finance ministers are likely to consider next week the option of raising the effective lending capacity of the European Financial Stability Facility (EFSF) to a full 440 billion euros ($570.3 billion), from around 250 billion now, as part of efforts to calm sovereign debt markets, sources told Reuters on Tuesday. [ID:nLDE70A1RM]
Rehn said Europe also needs structural reforms that will boost its capacity to create jobs and ensure sustainable public debt.
He said the national reform programs carried out by EU member states will push forward these reforms but added that they have insufficient ambition and a lack of urgency in implementation.
(Writing by Karolina Tagaris; Editing by Jon Hemming)