‘Lot of Money’ Left in Euro Zone Rescue Fund: CEO
There is still “a lot of money” left in the European Financial Stability Facility (EFSF), the fund set up to bail out struggling euro zone countries, Klaus Regling, chief executive of the fund, told CNBC Thursday.
“The markets only look at size (of the fund), and that’s a big mistake,” Regling said in an interview at the World Economic Forum in Davos. “There are many other things, like fiscal consolidation, and better financial market regulations in Europe, which will be better after the crisis.”
Market worries about the size of the fund have dampened European markets and the value of the euro since the EFSF was launched in 2010. It was enlarged last year as the euro zone debt crisis worsened.
Regling is “confident” that the International Monetary Fund will help out Europe again if another euro zone country is forced to seek a bailout – as Greece, Ireland and Portugal have already done.
He maintained that the downgrade of the EFSF by rating agency Standard & Poor’s had not hampered the fund’s ability to borrow money.
“The perception is negative, and it’s not justified by facts,” he said. “If people don’t understand how the EFSF works, they have not done their homework. It’s working.”
He pointed out that there are new instruments available which have not been used by any countries yet.
Regling's assessment of how the EFSF is perceived was perhaps ironic given that he gave the comments at the Davos Summit.
"When I listen to views here in Davos, it is excessively negative on Europe and the euro," he said.