The figures you care about are in that final row. They shows how much new funding the euro zone will have available at any given time to backstop Spain, Italy or any other euro-zone state that faces forbiddingly high borrowing costs or needs help to recapitalize its banks. That –rather than the higher number that could be promoted as the consolidated ceiling of the two funds– is the likely yardstick that other Group of 20 countries will examine before deciding whether the euro zone has done enough to deserve their help.

http://blogs.wsj.com/brussels/2012/03/28/the-plan-to-boost-the-bailout-funds/

A German-backed proposal to expand the size of the euro-zone bailout funds is gaining ground, officials tell us, ahead of a meeting of euro-zone finance ministers on Friday in Copenhagen that is expected to seal a deal. 

Under the favored option, the region’s bailout funds would rise temporarily to roughly €650 billion ($799 billion) by July. The arrangement would see the transitional European Financial Stability Facility continue running until June 2013 in parallel with the new, permanent bailout fund, the European Stability Mechanism.

The EFSF will maintain its €200 billion of commitments to the Greek, Irish and Portuguese bailouts, but its spare lending capacity of €240 billion is expected to be wiped out after mid-2013.

The EFSF will maintain its €200 billion of commitments to the Greek, Irish and Portuguese bailouts, but its spare lending capacity of €240 billion is expected to be wiped out after mid-2013.

That suggests you probably should not take too much notice of reports of an agreement to boost the combined lending ceiling to €940 billion, a figure that represents the maximum combined size of both funds. In fact under the German plan, as we explain below, the funds available for borrowing at any one time are likely to be substantially smaller.

Crucially, finance ministers are also moving towards a deal to pay cash more quickly into the ESM, which will eventually have a €500 billion lending capacity to help troubled euro-zone countries. Under the preferred option, officials say, the ESM would start with a €200 billion lending capacity on July 1 but increase to its full capacity by 2014.

The ESM has to hold about 15% of capital against its lending capacity in order to maintain its triple-A credit rating. When the ESM was first conceived, the idea was to inject the €80 billion of paid-in capital in five equal annual installments of €16 billion. Since then, the start-up date for the ESM has been brought forward one year to July 2012, and agreement reached to pay in two installments of capital, amounting to €32 billion, when it becomes operational.

Officials tell us that a consensus will likely be reached in Copenhagen to pay in two extra tranches in 2013 and one in 2014.

Despite this, officials say, unless paid-in capital is further accelerated, the funds’ actual combined size won’t top €700 billion at any stage. That’s because by the time the ESM lending capacity ramps up to roughly €400 billion by mid-2013, the EFSF will have been phased out.

Hence, the following rough estimates of the likely scale of the available bailout funding.

	NOW	JULY 2012	JULY 2013	JULY 2014
ESM PAID-IN CAPITAL	0	32	32	16
ESM LENDING CAPACITY (15% RATIO RULE)	0	210	420	500
EFSF SPARE CAPACITY	240	240	0	0
EFSF  COMMITMENTS	200	200	200	200
TOTAL  LENDING  CAPACITY  (minus  commitments to  GRE, IRE,  POR)	240	450	420	500