European Debt Relief Expansion Talks About &Nbsp; Eurogroup Denies 2 Trillion Capital Injection Plan

The day before yesterday, the European financial stability mechanism was used for relief.

EFSF scale will not expand to 2 trillion

Although there are reports that Slovenia and Greece's parliament voted to approve the EFSF expansion bill.

But media reports said Juncker, the chairman of the euro group, responded that it would not expand the fund.

In addition, the German government denied Tuesday that the expansion of EFSF will exceed the agreement reached by the 17 governments of the euro area in July.

Steffen Seibert, spokesman for German Chancellor Merkel, said the expansion of EFSF should be in line with the plan reached in July 21st.

Spain's economic minister Salgado also said there was no plan to expand the EFSF rescue fund to 2 trillion euros.

Earlier, the media reported that European financial stability.

ECB rescues 3 possible moves

1 purchase of asset backed bonds

The resumption of the purchase of asset backed bond measures will ease the balance sheet of banks and will have a positive impact on interest rates. It also encourages banks to issue new loans and lend money, especially property loans.

2 provide one-year loans.

Once again, providing one-year loans to commercial banks in the region and increasing liquidity can greatly ease the tension of market credit, improve the financing environment of banks and reduce the chance of credit crunch.

3 interest reduction

At a rate of 0.5%, the interest rate returned to 1 yuan at the beginning of the year, and the cost of borrowing declined, encouraging companies to seek long-term loans to increase investment and recruitment. But the news indicates that the central bank is inclined to take other methods first, and if interest is not considered, interest rates will be reduced.

EFSF pformation possibility

1 change to a bank

If banks are changed into banks, they can refinance from the European Central Bank, such as buying European debt from the two tier market, and using bonds as collateral for financing to the central bank, so that EFSF's existing 440 billion euro funds will be expanded at a geometric level.

2 speed up the ESM process.

If the plan to turn EFSF into a European stability mechanism in the middle of 2013 will be accelerated, ESM, which has 500 billion euros of capital, will be more likely to get a licence to solve the problem.

3 as the guarantee of the European Central Bank's purchase of European coupons.

EFSF can be used to limit the potential losses of the ECB to buy European debt, so that the ECB will not lose money by buying bonds.

4 as investors' guarantee

EFSF can also guarantee or even collect fees for other European financial institutions to buy European debt.

Secured bonds or restart

Recently, the German Prime Minister Merkel, speaking on the 27 day, said that Germany will do its best to support Greece and will do its best to restore the confidence of the market to Greece, following the 25 day's emphasis on not letting Greece out of the euro area.

Venizelos, Greece's deputy prime minister and Minister of finance, also reiterated in September 27th that Greece will receive sixth rescue loans from the European Union and IMF in time, and will not default on October.

In addition, a number of news about specific rescue measures also continued to flow out.

According to Peng Boyuan, a central bank official in the eurozone, the ECB may discuss next week about resumption of the purchase of secured bonds and other measures to inject liquidity into the European banking sector.

According to the sources, the ECB policymakers have not yet decided on the size of the underlying secured bond purchase plan.

Or use a 12 month refinancing tool.

In addition, foreign reports reported that Jozef Makuch, member of the European Central Bank's management committee, said on Tuesday that the ECB is ready to deploy all mobile liquidity injection tools, including 12 month refinancing tools aimed at commercial banks, to help banks carry out long-term financing and ease market tensions.

The expectation that the ECB will cut interest rates as early as October will also continue to rise, mainly because the ECB management committee member Cohen said earlier that if the economic data were lower than expected, the ECB would take action as early as possible next month to deal with the risk of economic slowdown.

At a recent meeting, Tyse, the governor of the European Central Bank, made a hint that he would suspend interest rates, and emphasized the risk of economic slowdown. However, the news showed that there were still some differences between the central bank members in the interest rate cut.

Internal differences are still serious.

In addition to differences in the willingness of the European Central Bank to cut interest rates, the rescue plan for Greece is not as good as investors expect.

It is reported that there is a serious divergence between the EU Member States on the Greek rescue plan. According to the financial times, some countries require private creditors holding Greek bonds to bear more losses. This has shaken investor confidence and led to the narrowing of the three major stock indexes of the New York stock market that was strong on that day.