EU to consider boosting rescue fund

European Union members appear to be more inclined towards boosting the euro zone bailout fund as their finance ministers are gathering in Brussels early next week for a regular Economic & Financial Affairs Council (Ecofin) meeting.

European Commissioner Michael Barnier said yesterday in Athens that the European bloc has agreed in principle to boost the support mechanisms for cash-strapped member states.

"The position of the EU is clear and there has been a decision to boost support mechanisms. The specifics of this will be decided by finance ministers," Barnier was speaking at a press conference after meeting with Greek leaders.

French finance minister Christine Lagarde also indicated euro zone states are looking at means to introduce a permanent response mechanism to deal with future crises as agreed at last month's EU summit.

"Our work includes looking at a variety of instruments. It's not just the fund coupled to a figure," Lagarde told reporters Friday in Paris, further adding that the measures could include buying euro zone bonds of weaker nations from the market.

The need for a permanent rescue mechanism arose last year when EU nations had to work out the details a financial package to rescue Greece's troubled economy. A temporary €440-billion fund was set up in May under the European Financial Stabilisation Fund (EFSF) that will remain in force until June 2013.