A European Union financial stability fund with the potential to raise up to 440 billion euros ($580 billion) to help EU countries weather debt problems is now fully operational, officials said on Friday.
With financial markets restabilising after the worst of the Greek-inspired debt crisis and Athens itself getting a positive report from European Union and International Monetary Fund officials this week, it is hoped the fund will never be tapped.
The fund — officially called the European Financial Stability Facility — was agreed by EU leaders in June and is effectively underwritten by all 27 EU member states.
It became fully operational on Aug. 4 when Italy confirmed its commitment to providing guarantees, EFSF officials said.
"I am pleased that the euro zone member states have taken the final step to set up the EFSF," Klaus Regling, the chief executive of the fund, said in a statement.
"The EFSF is fully operational now and can, if necessary issue bonds with the help of the German Debt Office, which would be guaranteed by the euro area member states."
While the fund, headquartered in Luxembourg, is operational, it has still not received a credit rating, which will be critical to determining how much it has to pay when issuing debt -- if it ever has to do so.
It is expected to receive a AAA rating from the major ratings agencies — the same rating that the European Commission, the EU's executive, has received for funds it raises with the backing of all EU member states.
An official with the EFSF said notification of the rating was in the hands of the credit agencies.
"There is no set date/timetable," an official said in an emailed response to a query.
"It is up to the credit ratings agencies themselves, and they'll take their decisions in due course on the basis of the engagement that EFSF has had with them."
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