European governments capped fresh rescue lending at 500 billioneuros ($666 billion), after a Germany-led coalition opposed afurther expansion of the region's anti-crisis firewall.

Adding the 300 billion euros already committed to Greece,Ireland and Portugal, euro-area finance ministers put the overallsize of the firewall at 800 billion euros. In a statement, theyruled out using the 240 billion euros left in the temporary rescuefund to go beyond that.

“This sum is important,” Austrian Finance Minister Maria Fektertold reporters at a meeting of European finance ministers inCopenhagen today. “Considering the involvement of the InternationalMonetary Fund as well as the discussions at the G-20, jointparticipation depends on what Europe does — and Europe has nowfixed this sum clearly.”

Europe is counting on the sums pledged so far, plus a 1trillion-euro cash infusion by the European Central Bank into thefinancial system, to persuade the rest of the world that it isdoing enough to keep the two-year-old debt crisis at bay.

As flagged by German Chancellor Angela Merkel, the richcountries endorsed an increase of the overall lending ceiling to700 billion euros to cover the planned 500 billion-euro permanentEuropean Stability Mechanism plus 200 billion euros committed bythe temporary fund to Greece, Ireland and Portugal.

Richer countries refused to go further, tossing out a proposalto make the money left in the temporary fund fully available.Instead, that 240 billion-euro sum will be used only to get the ESMup to its full 500 billion euros during its two-year buildupstarting in July.

“That is no longer in there,” Dutch Finance Minister Jan Kees deJager said. “If the 500 billion euros in fresh capital isn'tavailable, then we're willing to guarantee the 240 billioneuros.”

European officials wheeled out a variety of numbers — includingbilateral loans to Greece in 2010, loans from a now- defunctcentrally managed fund and the ECB's cash infusion to banks — todefuse international criticism of Europe's response to thecrisis.

“Robust firewalls have been established,” the ministers'statement said. “This comprehensive strategy has paid off and ledto a significant improvement in market conditions.”

Officials will hold press conferences later today to providedetails. The euro meeting's chairman, Luxembourg Prime MinisterJean-Claude Juncker, cancelled his scheduled briefing after Fekterwent public with the news first.

Bloomberg News

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