Eurozone chief Jean-Claude Juncker says finance ministers from countries that use the euro currency have agreed to bolster their lending capacity to help struggling nations.
Juncker said after a meeting in Brussels Monday that the ministers believe the European stability fund needs to be more flexible. He also said they are considering giving countries that have taken bailouts — Greece, Ireland and Portugal — lower interest rates and more time to pay back the loans.
Juncker said details will be released shortly.
Global stock prices fell sharply Monday in part because investors grew more worried that the European debt crisis might hit Italy next. Investors apparently were shaken by political bickering in Italy’s government over a proposed austerity budget that would cut its debt.
Bailing out Italy would be more difficult because it has Europe’s third-largest economy and is far bigger than the countries that have received aid so far.
In comparison to the size of its economy, Italy’s debt is second only to Greece in Europe.