EU Official Says New EFSF Plan Is 'Well Advanced', Awaiting Approval

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Photo: Lars Aronsson, Wikimedia Commons

CNBC is citing an EU official who says that a plan for a leveraged EFSF is virtually ready to go, and is simply awaiting approval from EU leaders.The plan allegedly includes measures to increase the funding of the EFSF and recapitalize European banks.

Various EU officials have denied the existence of such a plan today — most recently German Finance Minister Wolfgang Schaeuble. This back and forth has stoked the rumour mill all day.

UPDATE:

Here are the details on that plan, again according to the unnamed official cited by CNBC:

– Some EFSF funds would be used to recapitalize banks.

– Other EFSF money would be used as seed money for the European Investment Bank.

– This bank would be used as a special purpose vehicle (SPV) and would issue bonds and purchase sovereign debt.

According to this unnamed “top European economic official,” the plan is being kept under wraps until it gets the approval of EU governments. However, the official said the plans are already “well advanced.”

CNBC says we won’t see an official announcement until after the existing EFSF expansion plans are passed.

No word yet if this is just the latest rumour flying around or whether this plan is real. Either way, markets are going crazy.

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