|Eurozones ministers pose for a familly photo after an European Stability Mechanism meeting, in Luxembourg, Oct. 8, 2012. (Xinhua/Thierry Monassei)
LUXEMBOURG, Oct. 8 (Xinhua) -- The euro area on Monday launched its permanent bailout fund, the European Stability Mechanism (ESM), as "a historic milestone in shaping the future of the European monetary Union," Eurogroup chief said.
"We took today in a very swift way a number of well-prepared decisions and resolutions to make sure that the ESM can function in a proper way," Eurogroup President Jean-Claude Juncker said at a press conference.
The 500-billion-euro (about 653 billion U.S. dollars) permanent bailout fund is designed to provide financing to distressed eurozone members so long as they are committed to strict fiscal and structural reforms that aim to put economies that have lost investor trust back on track.
As chairman of the ESM's board of governors, Juncker hailed the launch of the fund as "a historic milestone in shaping the future of the European monetary Union and the euro area."
"Now it (the eurozone) is equipped with a permanent and effective firewall which is a crucial component in our comprehensive strategy to ensure financial stability in the currency union," Juncker told reporters as eurozone finance ministers kicked off their meeting.
"The introduction of the ESM has closed a gap in the euro area's institutional architecture. The ESM itself will certainly be regarded as a reassuring presence within and outside the European Monetary Union," he added.
Olli Rehn, the European Union (EU) Economic and Monetary Affairs Commissioner, echoed Juncker in highlighting the significance of the introduction of the ESM.
"The inauguration and start of operations of the ESM is a very important milestone for the eurozone and the the EU," Rehn told reporters as he arrived at meetings of eurozone and EU finance ministers.
"It provides the euro zone with a robust and permanent firewall and it provides us with a strong toolbox of effective and flexible instruments," added Rehn, who lamented the lack of instruments of crisis management two and a half years ago.
Back then, "we had to create the Greek loan facility and the temporary EFSF. We are moving forward and we are supplementing the Economic and Monetary Union (EMU) with one important building block," Rehn told reporters.
While admitting the euro crisis is far from over and "nobody is in party mood," Rehn stressed that, "I am less pessimistic for the moment for the eurozone than in the spring."
Juncker, also prime minister of Luxembourg, stressed that "the ESM is not a stand-alone instrument, but part of a comprehensive plan to reshape economic governance in the euro area."
The launch of the ESM, along with the legislative package on budgetary surveillance, the "fiscal compact" and the efforts to establish a single European banking supervisory body, would make the strategy of the eurozone "credible", he said.
The ESM's board of governors, which has held its first board meeting, has appointed Klaus Regling, head of the eurozone's temporary bailout fund, the European Financial Stability Facility (EFSF), as managing director of the permanent fund.
"The instruments of the ESM are the same as the instruments of the EFSF," said Regling at the same press conference.
These instruments include "country program loans under full adjustment, precautionary arrangements, interventions on primary and secondary market and bank recapitalization via the treasury of a country," Regling said.