LUXEMBOURG, Oct 8: The eurozone launches its much-awaited 500-billion-euro rescue fund on Monday, a positive backdrop for finance ministers trying to settle Greece’s tortuous debt bailout and as Spain agonises over seeking a rescue.

Finance ministers of the 17-state euro bloc gather just 10 days before the EU’s 27 leaders meet in Brussels, with recent market calm giving them some breathing room after months of turmoil and anxiety over Spain’s future. The meeting will see the formal launch and inaugural board meeting of the European Stability Mechanism, a key step forward in the eurozone’s defences against the debt crisis which has helped push the bloc back into recession.

The fund is not yet operational, however. Ministers will sign legal papers instituting the fund, which was initially due to enter service on July 1 but was delayed by a challenge at the German Constitutional Court. The ESM will have 200 billion euros of working funds once the first instalments of government capital are paid in by the end of the month, on top of about another 150 billion euros still available in a temporary fund, the European Financial Stability Facility.

“It is another very important instrument with an important funding capacity comparable only with the IMF,” said European Commission President Jose Manuel Barroso on Monday.

“Some years ago it would have been unthinkable to mention a kind of European Stability Mechanism of this magnitude,” he said, adding he was “fully confident” that eurozone governments would continue to “show our common determination facing the challenges and difficulties that we know still exist.”

Recent data shows Europe back in recession and threatening to slip further into the doldrums. The EU officials said on Friday that they did not expect Greece to get the green light, either in Luxembourg or at the October 18-19 Brussels summit, for the resumption of its drip-feed bailout after differences with its Commission, the ECB and IMF creditors.

The EU, IMF and ECB, the so-called “troika”, have been locked in discussions on more austerity with Greece which insists it has done as much as it can and now needs more time to meet the targets required.—AFP