The funds will most probably mostly come from the European Financial Stability Fund or EFSF.
The European Financial Stability Fund (EFSF) was stripped of its AAA rating yesterday.
Taxpayers were up in arms about Ms. Merkel's decision to bail out Deutsche Bank, despite the fact that Deutsche's loans to the ill-fated European Financial Stability Fund had been made at her government's behest.
If they have a choice, European officials would delay any bailout until the permanent European Stability Mechanism replaces the current temporary fund, the European Financial Stability Facility, later this year.
It is probably encouraging that there is growing talk among European regulators and ministers that the eurozone's bailout fund, the European Financial Stability Facility, should be able to buy Greek bonds in the market and then only demand repayment from Greece of the price actually paid for those bonds, the amount actually invested in the bonds.
An important issue point is whether the rescue funds will come from the European Financial Stability Facility, the temporary bailout fund that is being wound down, or its permanent replacement, the European Stability Mechanism.
One thing not to count on is the existing European Financial Stability Facility, and coming European Stability Mechanism and International Monetary Fund aid to be sufficient to rescue Spain and still have enough firepower to deal with Italy if needed.
Prime Minister George Papandreou was in Berlin last week before German lawmakers ratified changes to the European Financial Stability Facility, the euro rescue fund.
The rescue fund, the European Financial Stability Facility (EFSF), is far too small to be credible.
The EU's main bail-out fund - the European Financial Stability Facility - has been boosted to around a trillion euros.
The main sticking-point remains how to increase the firepower of the eurozone's main bailout fund, the European Financial Stability Facility (EFSF).
Europe's main rescue fund, the European Financial Stability Facility (EFSF), does not have enough money to withstand a run on Italy and Spain.
Countries can escape from the tyranny of the markets by turning to official lenders: other countries, the International Monetary Fund or the European Financial Stability Facility.
He also said the temporary bailout fund, the European Financial Stability Facility (EFSF), would be adequate to help Spain and Cyprus, the German newspaper Frankfurter Allgemeine reported.
The EU's main bailout fund, the European Financial Stability Facility (EFSF), which on 27 October was announced as having the firepower of a trillion euros, lies in limbo.
They agreed the terms and conditions of how to enlarge the firepower of the bailout fund, the European Financial Stability Facility, to somewhere between 830bn euros and 1.25tn euros.
The temporary rescue fund, the European Financial Stability Facility (EFSF), would be allowed to overlap with the permanent new European Stability Mechanism (ESM), which is to be activated this summer.
All of which implies that the bailout fund, the European Financial Stability Facility, would be required for the recapitalisation of Greek and Portuguese banks, and also - probably - Italian banks.
The package is expected to involve a quadrupling - from the current projected level of 440bn euros - in the firepower of Europe's main bailout fund, the European Financial Stability Facility (EFSF).
Late last night Moody's put the eurozone's operational bailout fund, the European Financial Stability Facility, on so-called "negative outlook", which means it is at serious risk of losing its AAA credit rating.
But what would really matter about Austria and France losing their AAA is that the downgrade would almost inevitably lead to the loss of the linked AAA held by the eurozone's bailout fund, the European Financial Stability Facility.
Even if the eurobond moment has not yet arrived there are others suggesting that the main bailout fund, the European Financial Stability Facility (EFSF) should be increased in size so that it could support Italy, Spain, or even Belgium.
At this stage, it is unclear how many of these banks will be able to raise the money from commercial investors, how much of the capital will have to come from national governments, and how much will be required from the eurozone's bailout fund, the European Financial Stability Facility (EFSF).
Also the ECB implied that it would buy Spanish and Italian bonds only until eurozone governments have ratified a rescue package for their currency union that was agreed on 21 July, which would allow their bailout fund - the European Financial Stability Facility - to buy the debt of eurozone members facing funding difficulties.
It will also be seen as progress that the 250bn euros left in the kitty of the bailout fund, the European Financial Stability Facility, is to be multiplied four or five times by the use of financial engineering - which President Sarkozy hopes will see the China involved in rescuing highly indebted countries like Italy.
On the other hand, funding the rescue from the temporary fund -- the European Financial Stability Facility -- could give difficult eurozone members like Finland a chance to ask for collateral from Spain.
So it would be absurd to expect their taxpayers to put extra capital into Greek and Portuguese banks: they will need money from the European Financial Stability Facility, the eurozone's main rescue fund, to recapitalise their banks.
And if the price is unbearably large, would it make sense for Spain to request a bailout from the International Monetary Fund or the eurozone's European Financial Stability Facility (EFSF) or both?
In particular, it failed to increase further the lending capacity of the European Financial Stability Facility (EFSF), the single currency's rescue fund.
The European Financial Stability Facility (EFSF), the euro zone's bail-out fund, must carry out simultaneous injections of capital into the region's banks as soon as it can.
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