UPDATE 1-Euro leaders to ensure "adequate" EFSF funds-draft

* Euro zone leaders ready to ensure adequate funds for EFSF

* Draft statement to be issued at EU summit

(Adds details, quotes)

BRUSSELS, Dec 16 (BestGrowthStock) – Euro zone leaders will declare
their readiness to ensure adequate funds are available for the
euro zone rescue fund, the European Financial Stability Facility
(EFSF), a draft statement showed on Thursday.

The draft statement, to be issued at a two-day European
Union summit in Brussels, said euro zone leaders and EU
institutions would do “whatever is required to ensure the
stability of the euro area as a whole”.

It said the euro area leaders would therefore pursue a
strategy which entailed ensuring the availability of “adequate
financial support through the EFSF pending the entry into force
of the permanent mechanism.”

The leaders, who have been under pressure to increase the
funds available to the mechanism, would “note that only a very
limited amount has been drawn from the EFSF to support the Irish

“We stand ready to do whatever is required to ensure the
stability of the euro area,” the draft said.

The EFSF was set up to help struggling euro zone countries
after Greece required a rescue in May, and Ireland has also
needed a bailout since then.

It has euro zone government guarantees for 440 billion euros
but its effective lending capacity to euro zone governments cut
off from market financing is smaller due to the need to maintain
a triple A rating because not all euro zone countries issuing
guarantees for the EFSF are rated triple A.

The draft statement said euro zone governments would meet
fiscal consolidation targets in 2010 and 2011 and beyond.

“We are strongly committed to achieve budget deficits lower
than 3 percent of GDP by 2013 at the latest,” the draft said,
noting Greece and Ireland had until 2014 and 2015 respectively.

The leaders will also pledge to step up structural reforms
and strengthen EU budget rules on the basis of European
Commission proposals from late September, the draft showed.

It said they would commit to conducting new stress tests of
banks and make them fully transparent and “implement swift and
decisive measures to strengthen and reform financial

They will also express full support for European Central
Bank actions which contribute to the financial stability of the
euro zone, the draft showed.
(Reporting by Luke Baker, writing by Jan Strupczewski, editing
by Timothy Heritage)

UPDATE 1-Euro leaders to ensure "adequate" EFSF funds-draft