Eurozone to push on with crisis steps, Fitch doubts outcome

The eurozone will pursue measures to tackle its sovereign debt crisis this week by offering more cash to the IMF and long-term liquidity to banks, while moving towards tighter fiscal rules, after ratings agency Fitch cast doubt on it ability to forge a decisive response.
"We all know that Europe has not been able to convince markets that its governance set-up and its measures against the crisis were enough," Italian Deputy Economy Minister Vittorio Grilli said in a newspaper interview published on Sunday.
"More integration and more effective instruments are needed. We are not yet there," he told Il Sole 24 Ore. Euro zone leaders agreed on December 9 to write into national constitutions a rule that budgets have to be balanced or in surplus in structural terms. If they are not, automatic corrective measures would follow.
Such rules would sharply limit government borrowing, bring down debt and, eurozone politicians hope, help restore market trust in the sustainability of public finances. But constitutional changes will take a year or more and markets want reassurance now that money invested in eurozone debt is safe, especially after banks were asked to accept a 50 percent loss on their Greek bonds in October as part of a second bailout of the country which sparked the debt crisis.
European leaders have belatedly insisted that the Greek case was unique and did not set a precedent. To address market concerns that they do not have enough money to prevent the crisis from engulfing Italy and Spain, eurozone leaders brought forward by one year to July 2012 the launch of their 500 billion euro permanent bailout fund. They also agreed to offer 150 billion euros in bilateral loans to the IMF to raise its crisis-fighting capacity.
Up to 50 billion euros more might come from non-eurozone European countries and possibly more from outside Europe.
Eurozone finance ministers will discuss at a Monday teleconference the draft text of the new eurozone fiscal compact so that it can be finalised by the end of January, EU officials said. They will also consider the size of individual bilateral loans to the International Monetary Fund, in talks from 1430 GMT.