The euro-region rescue fund should be empowered to bail out banks and buy bonds on the market even though it’s “highly unlikely” that the debt crisis will spread to either Spain or Italy, according to Bank of Italy Director General Fabrizio Saccomanni.
“It would be useful to increase the effective size of the EFSF, which is less than its nominal value, and especially to raise its operative potential,” according to a transcript of a speech Saccomanni delivered today in Berlin. These steps should be taken even in the improbable scenario that the debt crisis extends to bigger countries such as Spain and Italy, he said.
