Deal on EU rescue fund nears completion

EFFORTS to put together the so-called bazooka to ringfence the euro and its vulnerable member states from the markets were inching their way towards a conclusion last night, but the final deal will have to wait until the EU leaders return to Brussels on Wednesday.

There are a number of apparently conflicting demands from France and Germany for putting together a fund big enough to protect Spain and Italy from market speculation.

France and Germany do not want to have to guarantee any more than they have already committed to the European Financial Stability Facility (EFSF) — Germany because its public won’t tolerate it, and France because it too is already under pressure from the markets.