Euro zone to speed up ESM capital pay-in

Euro zone finance ministers will discuss an increase in the combined lending capacity of their temporary and permanent bailout funds at an informal meeting in Copenhagen on Friday.

The European Stability Mechanism (ESM), which is to take effect in July, is ultimately to have a maximum lending power of 500 billion euros ($666 billion). But it will only reach that once all the tranches of its capital from euro zone governments are paid in.

Euro zone leaders initially agreed to pay the 80 billion euros of ESM capital in five annual tranches, but later decided to shorten that to four years by paying in the first two tranches together. Now, a further acceleration is possible.

"What you have is a possibility of accelerating further the next three tranches, for example two in 2013 and one in 2014 – that is a possibility, not a necessity, but it is a possibility," a senior euro zone official said.

"It pulls forward the overall disbursement capacity of the ESM as a certain gearing ratio needs to be maintained at all times," the official added.