Eurozone finance ministers have once again failed to appoint a new head of the bailout fund

BRUSSELS, July 11 (Reuters) – After months of trying, eurozone finance ministers failed again on Monday to choose a new head of the bloc’s bailout fund, EU officials said.

Ministers need to agree on a successor to Klaus Regling, who will step down in October after leading the European Stability Mechanism (ESM) since its creation in 2012 amid the eurozone debt crisis.

One of the three candidates, Italy’s Marco Buti, resigned before Monday’s election, but neither of the other two candidates received enough votes to be appointed.

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Former Luxembourg finance minister Pierre Gramegna and former Portuguese finance minister Joao Leao remain in the race.

A possible decision has now been postponed until a meeting in September, the official said. Already in June, the ministers failed to reach a compromise. read more

Gramegna is a career diplomat who served as Luxembourg’s finance minister for nearly a decade before resigning earlier this year. He ran twice for the post of head of the powerful Eurogroup of eurozone finance ministers, but lost both times to other candidates.

Leao was finance minister for about two years until last March when he was sacked after Portugal’s general election.

The ESM is Europe’s lender of last resort to governments, issuing bonds guaranteed by all 19 eurozone countries. It has a credit capacity of 500 billion euros.

The ESM can also extend precautionary credit lines to governments before they lose access to markets, directly recapitalize banks or lend to governments for this purpose, and buy government debt in primary and secondary markets.

During the pandemic, the ESM also offered loans to eurozone governments for healthcare, treatment and prevention costs, but no country took up the option.

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Reporting by Francesco Guarascio @fraguarascio Editing by Tomasz Janowski

Our Standards: The Thomson Reuters Trust Principles.

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