Reuters has reported that the Eurozone finance ministers have agreed to use their bailout fund, the European Stability Mechanism (ESM), as an emergency backstop for the single currency area's bank resolution fund. This was according to the German Finance Minister Olaf Scholz.
''The agreement, stalled since last year, will make the eurozone more stable and resilient to future crises'', Scholz said.
"There are decisions, especially at the EU level, that sound so technical that it is difficult to recognise their political impact at first glance," Scholz explained.
"Today's agreement on the reform of the European rescue fund ESM is such a decision: The ESM reform strengthens the euro and the entire European banking sector. Because we are making the eurozone even more robust against attacks from speculators," he said.
This is a stabilising factor for the euro which has been propelled higher on dollar weakness and despite the concerns over the deflationary consequences of the economic crisis, reinforced by the recent wave of lockdowns.
''The challenges facing the ECB are enormous and a comprehensive recalibration of unconventional policy tools is warranted, the details of which will be announced next week when the ECB meets (10 December),'' analysts at ANZ Bank explained.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.