And the stability of the euro zone is therefore an important factor of stability for the whole of the global economy.
WHITEHOUSE: President Obama and Chancellor Merkel Press Conference
Merkel has suggested she would like to see the EU have the right to interfere in national budgets in extreme cases where euro zone stability is put at risk.
He also wants to increase the size of the European Stability Mechanism, the zone's permanent bailout fund which will be up and running later this year.
It was also agreed that the European Stability Mechanism (the zone's permanent bailout fund that will start operating in July) could buy government bonds and drive down a country's borrowing costs.
America has the Congressional Budget Office (CBO) and the euro zone has the Stability and Growth Pact (see article).
VAT, in order to ensure that Portugal does not flout the deficit ceiling of 3% imposed by the euro-zone's stability pact.
Meanwhile banks across the pond in Europe are doing significantly worse as worries increase about their stability amid the euro-zone debt crisis.
Mr Garicano believes Spain wouldn't be able to raise that much money in a hurry, and would have to seek help from the European Financial Stability Facility, the euro zone's bail-out pot.
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It needs to make savings as early as next year if it is to carry out its promised tax cuts of euro3 billion without breaking the deficit limit decreed by the euro zone's stability and growth pact.
The deficit is currently running at almost twice the level permitted under the stability pact for countries within the euro zone.
The European Financial Stability Facility (EFSF), the euro zone's bail-out fund, must carry out simultaneous injections of capital into the region's banks as soon as it can.
German Chancellor Angela Merkel has been struggling to maintain her coalition in parliament while she attempts to gain approval for the new powers of the European Financial Stability Facility to provide liquidity to ailing euro zone nations.
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Mr. Van Rompuy said he and Mr. Lew talked about the next steps in building the banking union, including work on a facility to allow the euro-zone bailout fund, the European Stability Mechanism, to directly recapitalize ailing banks without having to go through national governments.
Ratings downgrades could push up borrowing costs and cast doubt on the viability of the European Financial Stability Facility, a vital element in the euro zone's crisis-fighting defenses.
But some euro-zone policy makers feel they have heard these financial stability warnings before, not least over the Greek debt write-down, and no longer find them persuasive.
For instance, the bank's latest Financial Stability Report, released on Thursday, warned that the euro zone's debt woes were threatening to ignite a systemic financial crisis, with all that implied for the economy.
But Germany has categorically ruled out direct recapitalizations by the European Stability Mechanism, reneging on the solution apparently agreed by euro-zone leaders last June.
But even if the euro zone were willing to take the hit to preserve financial stability, there is no legal mechanism for it to do so.
The stability-and-growth pact approved by the members of the euro zone looks for budget balance by 2004.
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In Berlin, the German Bundestag is expected to approve extending the size and scope of a euro zone bailout fund with the marble-mouth sounding name of the European Financial Stability Facility.
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The October 2012 Global Financial Stability Report (GFSR) finds increased risks to the global financial system, with the euro-zone crisis the principal source of concern.
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Then came the European Financial Stability Facility, but it turns out to be too puny to halt the bond vigilantes' rampage through the euro zone, and anyhow rests in part on France's waning ability to join Germany as a guarantor by retaining its triple-A credit rating.
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