COPENHAGEN, March 30 (BSS/AFP) - Eurozone nations are set to lash today over boosting the zone's "firewall" against its debt risis, as Spain's fiscal woes stokes fears that the bloc could et be pitched into a new emergency.
Under huge international pressure, finance ministers from he 17-nation currency zone gather for a two-day meeting in openhagen to consider ways to bolster defences against a esurgence of the worst economic crisis in the bloc's history.
Ministers agree that the firewall needs to be strengthened rom the current maximum lending capacity of 500 billion euros $665 billion) which the eurozone permanent bailout pot, the ESM, will have when it comes into force in July.
But member countries are divided over how much more money should be laid aside, with France and the European Commission eyeing near to a trillion euros in funds while Germany, Europe's top economy and paymaster, remains much more cautious.
According to well-placed European sources, there are three main options on the table.
These alternatives would boost the headline figure by anywhere between 700 billion and 940 billion euros but will likely also include money already pledged to debt-wracked countries such as Greece, Ireland and Portugal.
Eurozone officials, seeking a compromise, are proposing a formula that would give the bloc 940 billion euros for one year, sources close to the negotiations have told AFP.
The fund would be reviewed in the summer of 2013, and "if there is no need to keep this system, we would return to around 700 billion euros," one of the sources said.
Meanwhile, Europe's partners from Washington to Tokyo and including groups such as the International Monetary Fund want to see the bloc ring- fenced as effectively as possible against a new crisis that would affect the whole world.
The Organisation for Economic Cooperation and Development (OECD) set the cat among the pigeons earlier this week by calling for a one-trillion-euro pot, which OECD head Angel Gurria calls "the mother of all firewalls."
And leading and emerging nations of the group of 20 (G20) have said they will only consider lending more to the IMF to combat the eurozone crisis if the bloc first stumps up enough cash to tackle their own problems.
Members of the IMF will meet in late April to consider a request to boost the body's lending capacity by $500 billion in case it is needed to bail out another eurozone country.
The eurozone meeting in Copenhagen comes amid violent turmoil in Spain as the government prepared to unveil more austerity measures to tackle a spiralling budget deficit in the face of a general strike.
Hundreds of thousands of protesters swamped Spain's streets on Thursday to back a general strike, marred by clashes in Barcelona.
Spanish borrowing costs have risen in recent weeks after Madrid admitted it had missed its 2011 deficit target of 6.0 percent of gross domestic product, reporting 8.5 percent instead.
Another thorny issue facing the ministers is to reach agreement on a raft of top EU appointments, likely to result in a difficult session of horse-trading.
The Eurogroup of eurozone finance ministers must find a replacement for its current head, Luxembourg's prime minister Jean-Claude Juncker, as well as a new member for the six-person executive board of the European Central Bank.
Current German Finance Minister Wolfgang Schaeuble is one possible candidate to replace Juncker but may run into resistance from some countries due to his hardline stance on deficits and austerity.
The current head of the central bank of Luxembourg, Yves Mersch, is seen as the favourite to clinch the ECB job.
However, a decision on the new Eurogroup head is unlikely at the Copenhagen meeting, with French Finance Minister Francois Baroin saying Paris would rather wait for the results of the French elections, on May 6.