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Eurozone rescue fund launched

  • The eurozone's new permanent fund to bail out struggling economies and banks was formally launched at a meeting of finance ministers in Luxembourg on Monday.

    The European Stability Mechanism (ESM) will have a lending capacity of $650 billion by 2014.

    It will initially run alongside, and eventually replace, the European Financial Stability Facility (EFSF).

    Europe's largest economy, Germany, is to make the biggest contribution to the fund, accounting for around 27 percent of its total.

    Countries will make their first payments towards the fund over the course of the week.

    The ESM will be chaired by Jean-Claude Juncker, the Prime Minister of Luxembourg and chair of the Eurogroup.