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Government mulls possibility of bigger euro bailout fund

Government is considering the possibility that the eurozone’s permanent bailout fund – the European Stability Mechanism or ESM -- may increase, hiking Finland's contribution in the process.

Jutta Urpilainen Image: Yle

Finance Minister Jutta Urpilainen appeared before Parliament’s Grand Committee to seek guidance on Finland’s stake in the fund Tuesday afternoon. However the Grand Committee will make a decision on Friday on how much more Finland should pay.

EU Finance Ministers will also meet in Copenhagen Friday to consider the size of the permanent crisis mechanism. EU Commission Vice President Olli Rehn said agreement on the final size of the fund is expected at the end of Friday’s meeting.

Finance Minister Urpilainen did not want to speculate on any outcomes.

”It’s no secret that some would like to increase the firewall to 940 billion euros, which would be difficult from the Finnish perspective,” Urpilainen said.

”But whatever the size and how it will be achieved, that’s what we will now be discussing, and those decisions will be made Friday,” she added.

Meanwhile Angelo Gurria, head of the Organisation for Economic Cooperation and Development, the OECD, has called for the fund to be increased to one trillion euros to withstand the impact of further possible national bailouts.

German Chancellor Angela Merkel reportedly favours only a temporary increase up to 700 billion euros.

Related stories: Rehn: Deal likely on size of eurozone rescue fund