Final details for the new permanent bailout fund of the European Union are being put together in Luxembourg.
Eurozone Finance Ministers are holding their inaugural meeting 2 years after EU leaders endorsed the idea of setting up such a permanent institution.
The Ministers will form the board of governors of the European Stability Mechanism (ESM).
The lending capacity of the fund will eventually reach its full amount of €500 billion by 2014.
The first recipient is expected to be Spain which may start drawing down funds for its ailing banks next month.
Madrid is likely to ask for about €40 billion to recapitalise its banks following independent assessments of the sectors’ needs well within the €100 billion set aside by Eurozone Finance Ministers for the purpose in July.
The ESM money would flow to Spain in November after European Commission competition authorities approve conditions for the recapitalisation for each bank.
However an EU spokesman says the issue of whether legacy debt will be covered by the ESM has not been discussed.
The Managing-Director of the scheme says the issue of legacy bank debt has not yet been discussed by any EU body.
Klaus Regling made the remarks at the official launch this afternoon.
In June EU leaders pledged to break the link between bank and sovereign debt.
The Taoiseach Enda Kenny has previously said it was his understanding that the deal included legacy debt.
Meanwhile President of the Eurogroup Jean-Claude Juncker is hailing the ESM as an historic milestone.