BRUSSELS (MNI) – The European Union might only be able to reach
half the initial leveraging target of E1 trillion set for its bailout
fund, the EFSF, Dutch finance minister Jan Kees de Jager said Tuesday
evening.

“[The question] is how you achieve such an amount, de Jager said,
speaking to reporters ahead of the Eurogroup meeting here. “A lot of
countries have difficulty raising the resources, so we are looking at
private resources, private leverage, but it is still very difficult to
reach somewhere in the region of E1 trillion euros. Maybe we can reach
half of that.”

He also said the Netherlands supported the idea of increasing the
resources of the IMF.

“The Dutch position is that we also have to look to the IMF and we
have to be ready as European countries and non-Europeans, to increase
the resources of the IMF in order to step in more than it has already
done,” he said. Belgium’s Finance Minister Didier Reynders also backed a
call for bolstering the IMF, as has Finland.

De Jager said the EU and IMF could provide funding for banks if
they needed it, but it would be indirectly, through the national
governments.

Asked whether the ECB should be stepping up its activity to
safeguard financial stability in the Eurozone, de Jager replied that the
central bank “is independent and that the governments’ role “is to
provide, if necessary, enough money for the EFSF.”

But he conceded that, “there is a ceiling to that, and we must look
for other resources as well.”

Reynders said the finance ministers would talk with the ECB about
possibly lending to needy Eurozone states via the IMF. “We will discuss
this with the ECB. We will put on the table some proposals, but after
that it is up to the ECB to make decisions,” he said.

De Jager emphasized that “more money on the table is not a
fundamental solution to the problems we are facing.”

He stressed that his country’s position is to push for economic
reforms, austerity and more integrated governance to avoid further
fiscal derailment.

Luxembourg finance minister Luc Frieden echoed De Jager’s comments
on the EFSF, saying “it will be very difficult to reach the initial
target goal because of the market conditions.” He added that he would
wait to hear the views of the EFSF’s CEO, Klaus Regling, at the
Eurogroup meeting tonight.

Regarding the release of an E8 billion loan tranche for Greece,
Frieden said that the Eurogroup would be able to take a positive
decision “tonight” to disburse the money.

“We have to listen to the evaluation of the troika regarding the
sixth tranche, but I think that with the letters signed by the political
party leaders of Greece, one of the major conditions has been
fulfilled,” he said.

Greek Finance Minister Evangelos Venizelso, also attending the
meeting, appeared confident that Athens had met all the conditions for
disbursement of the much-delayed 8 billion euros, which was originally
due to be paid on September 15.

“In Greece we have now met all the necessary conditions to go ahead
with the next disbursement, the new program, and the PSI. We have the
necessary consensus and national unity and commitment and determination
to go ahead,” Venizelos said.

“We are also ready to contribute in this very important
discussion…to a strong Eurozone capable of reacting and sending a
clear message to the markets,” he added.

–Brussels newsroom, +324-952-28374; pkoh@marketnews.com
–Angelika Papamiltiadou, a_papamiltiadou@hotmail.com

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