Euro zone ministers agree to use ESM fund to backstop bank resolution

BRUSSELS (Reuters) – Euro zone finance ministers agreed on Monday to use their bailout fund, the European Stability Mechanism (ESM) as an emergency backstop for the single currency area’s bank resolution fund, German Finance Minister Olaf Scholz said.

The agreement, stalled since last year, will make the euro zone more stable and resilient to future crises, Scholz said.

“There are decisions, especially at EU level, that sound so technical that it is difficult to recognise their political impact at first glance,” Scholz said.

“Today’s agreement on the reform of the European rescue fund ESM is such a decision: The ESM reform strengthens the euro and the entire European banking sector. Because we are making the euro zone even more robust against attacks from speculators,” he said.