ECONOMY

Euro FinMins reach basic agreement on ESM bank funding

Eurozone finance ministers meeting have reached a preliminary agreement regarding the operation of the single currency’s rescue fund, the European Stability Mechanism, following talks in Luxembourg on Thursday.

According to the agreement, the ESM will will be able to inject funds directly into cash-strapped banks so as to limit the risk posed to the financial system.

“After several months of intensive preparations and discussions, today we reached political agreement on the main features of the ESM direct recapitalization instrument (DRI),” Eurogroup chief Jeroen Dijsselbloem told reporters. He described

the DRI as «one of the most important building blocks of the banking union.”

European Economic and Monetary Affairs Commissioner Olli Rehn said the new agreement had brought the bloc “closer to banking union.”