"...the key question is whether this new firepower [700 billion euros] is enough"
- Steve Barrow, head of G10 strategy at Standard Bank
Euro zone finance ministers agreed Friday to increase lending capacity of the temporary European Financial Stability Facility (EFSF) and the permanent European Stability Mechanism (ESM) to 700 billion euros.
"With Friday's increase, the role of the European Central Bank as Eurozone fire brigade is likely to continue," said Carsten Brzeski, economist at ING bank in Brussels.
"At the end of the day the key question is whether this new firepower is enough," said Steve Barrow, head of G10 strategy at Standard Bank in London.
"Clearly if things turn down again, and especially if more bailouts are needed, the tricky issue of underfunding the ESM/EFSF relative to the potential bailout need is bound to resurface."
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