Merkel Says EFSF Can Be Used as Last Line to Recapitalize Banks

German Chancellor Angela Merkel said that the European rescue fund can be used as a last line of defense to recapitalize banks if necessary to defend the euro.

If troubled banks can’t raise enough capital on their own, national governments may step in to help, Merkel told reporters in Brussels today. “If a given country cannot do it and the euro’s stability is in danger” it can ask the rescue fund, the European Financial Stability Facility, for aid in return for accepting conditions, she said.