Carmignac Gestion: EFSF bailout fund is inadequate

French asset management firm Carmignac Gestion has warned the European Financial Stability Fund (EFSF) is inadequate and ministers need to increase its firepower in order to quell the threat of contagion.

The group said with Italy sitting on a debt pile in excess of €2trn, the fund needs to be expanded to give European markets a much needed confidence boost. Eurozone leaders are in dispute over whether to increase the size of the fund, with French President Nicolas Sarkozy calling for the stimulus to be increased to €2trn, while German Chancellor Angela Merkel is opposed to the idea. Eric le Coz, Carmignac's deputy managing director, argued it may take a major event like a downgrade of France's AAA-sovereign debt rating to force ministers to put in place concrete plans. "The inabili...