“The measures will be pondered in the markets and we have to see whether confidence can be restored. There might be some concern over the resources available for the European Financial Stability Fund, as some of the troubled countries take out a big space in the debt market and the EUR1 trillion reserved for the fund could be seen as insufficient,” said Lucian Croitoru, adviser to central bank’s governor Mugur Isarescu.
Earlier Thursday, European Union officials announced a new strategy to fight the debt crisis. The measures include slashing Greece’s debt by EUR100 billion, increasing the continent’s emergency fund to EUR1 trillion to insure other economies are not swallowed into the crisis and boosting bank capital ratios by EUR106 billion.
However, restoring investor confidence in the euro zone economies depends on how well the markets will react to the new action plan, Croitoru said.
As to the recapitalization of euro zone banks, Croitoru said the measure should defrost credit markets. Nevertheless, some of the banks might consider that the new capital ratio requirement of 9% is too high, he added.