Commission: Changes to bailout funds not possible

Hopes to change the rules of the EU bailout funds to allow them directly fund bank rescues have been dashed, as the European Commission said it was not possible.

Taoiseach Enda Kenny said he would like to see the structure of the new permanent rescue fund, the ESM, change to allow this as he appealed to EU leaders for a political response to the debt crisis.

In a letter to the European Council ahead of next week’s summit in Brussels, Mr Kenny said they must avoid the mistake of allowing banking crises in some countries to develop into sovereign crises and beyond.