"We agreed on all aspects of the European Stability Mechanism," said Juncker, who heads the Eurogroup of finance ministers from the 17 states that share the single currency, after talks between all 27 EU members in Brussels. The permanent emergency rescue mechanism for eurozone countries, which replaces the existing 440-billion European, Financial Stability Fund as of January 1, 2013, will be created by a special treaty among eurozone states and based in Luxembourg like its predecessor.

"The mechanism will have access to a capital base of 700 billion ($996 billion)," Juncker spelled out, 80 billion euros in capital lodged up front  backed by 620 billion euros of guarantees from eurozone states, in order to obtain the best possible credit rating. EU Economic and Monetary Affairs commissioner Olli Rehn said the "paid-in" capital would start with a 40 billion euro injection, subsequently built up over three years, aimed at ensuring an effective lending capacity of 500 billion euros.

"To have that effective lending capacity, experience tells us we need to allow for this kind of margin," Juncker said.

"We invite the national parliaments to endorse this overall amount, so that in every circumstance, the ESM will have at its disposal the necessary amount of funding," Rehn insisted. The fund will be able to buy bonds issued by eurozone governments aimed at raising public finance, but only with strict conditions attached such as those countries having negotiated an adjustment programme in exchange for a bailout. In all cases, loans will require the parallel participation of the International Monetary Fund, but they will be handed out in line with IMF pricing, which has levied lower rates on Ireland to date than loans from eurozone or non-euro partners in Britain and others. Although ministers did not tackle how to ensure an effective lending capacity of 440 billion for the EFSF between now and June, Juncker said the eurozone should be trusted to deliver, as "political and legal" agreements are completed. Currently, the temporary fund, increasingly likely to be tapped by Portugal, the government of that country itself admitted Monday as a political storm gathers in Lisbon, is only able to lend out something like half of that amount.