UPDATE 2-EU rescue fund should be increased-Belgian finmin

* Belgium says EU needs more money for rescue fund

* IMF likely willing to help raise funds -finmin

* Belgium safe from debt problems for now

(Adds details)

By Justyna Pawlak

BRUSSELS, Dec 4 (BestGrowthStock) – The European Union’s permanent
rescue fund should be larger than the money available currently
and the increase could be made before 2013, Belgian Finance
Minister Didier Reynders said on Saturday.

However, any decision to top up funds for countries with
crippling debt problems should be made after the 27-member bloc
decides on the shape of a permanent solution to address
financial crises, he said.

Euro zone finance ministers outlined plans on Sunday for
such a permanent system, which the bloc would put into place in
2013 and base it on the current European Financial Stability
Facility (EFSF) that was set up in May.

Together with money from the International Monetary Fund and
other cash, 750 billion euros ($989 billion) was made available
in May for rescue efforts. [ID:nLDE6AR03X] [ID:nLDE6AR0FO]
[ID:nLDE6AS05Z]

“We need to increase the total amount of money for the
permanent mechanism coming in 2013. I am not asking for such an
increase now,” Reynders said on the sidelines of a conference in
Brussels.

“(But) If we decide (to increase it) in the next weeks or
months, why not apply it immediately to the current facility,”
he said. Belgium holds the EU’s rotating president until 2011.

The EU has already dipped into the funds to bail out
Ireland, and financial markets are not convinced the debt crisis
enveloping Europe has been contained. Spain and Portugal are
seen as the next in the markets’ firing line.

However, any moves to increase bailout funds would be
politically sensitive. Several euro zone countries, notably
Germany, were already reluctant to set up the EFSF and Berlin
might balk at the idea of putting up more cash.

Responding to Reynders’ comments, a German finance ministry
spokeswoman said Berlin saw no need to increase the size of the
safety net.

“There is no need to expand the fund,” Jeanette Schwamberger
said.

But Reynders said some support for the idea may be building
within the IMF, which had put cash into the EFSF.

“The IMF is in favour of a larger mechanism … and they are
ready to follow the process if we decide it in Europe.”

Earlier this week, a U.S. official told Reuters Washington
would be ready to support the extension of the EFSF via a
commitment of money from the IMF.

Reynders also said Belgium was safe for now from economic
woes of the scale that hit Ireland and Greece. In the past week,
financial markets appeared increasingly concerned about risks
posed by political squabbling in Belgium.

“We don’t have any real problems in Belgium for the moment
like that,” he said, adding that Belgium’s debt and deficit
levels were in line with EU requirements and the overall
economic situation was good.

UPDATE 2-EU rescue fund should be increased-Belgian finmin