European governments aim to quickly enact the European Stability Mechanism, reports Bloomberg. The ESM would be a permanent rescue fund of over $675 billion.The fund — initially outlined in the July 21 Greek bailout agreement — would serve as a permanent alternative to the European Financial Stability Fund.
Initially scheduled to be implemented in 2013, a staff paper cited in the report says that the ESM could be implemented by July 2012, a full year ahead of schedule.
The ESM would be supported by the Eurosystem’s paid-in capital, and could save money for countries like Germany.
That said, the increasingly anti-euro political climate in the eurozone core makes such a proposal surprising. The ESM would require significant strengthening of the European Monetary Union, and could violate a recent ruling by the German constitutional court.
The German government has said that it will not consider the ESM proposal until the EFSF expansion has been approved.
The development has not made markets move however, with the big three U.S. markets rapidly losing trading gains today.
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