Euro Zone Finance Ministers reached an agreement on Monday night to maintain the financial safety net for troubled member states at the present level, till it is replaced by a permanent European stability mechanism in mid-2013.
The ministers decided there is no immediate necessity to expand the 750 billion euro (nearly $1 trillion) financial rescue fund, Jean-Claude Juncker, Luxembourg's Prime Minister and the Chairman of the 16-nation euro group, said after their meeting in Brussels.
"We see no reason for an immediate action," he said.
The European Financial Stability Facility (EFSF) was set up jointly by the euro zone nations and the International Monetary Fund after heavily-indebted Greece was bailed out with the support of 110 billion euros in May, with the objective of helping other nations facing a liquidity crisis in future.
EFSF President Klaus Regling said it was wrong to assume that after last month's 85 billion euro ($110 billion) financial rescue of Ireland, the fund will not be sufficient if more nations needed support.
The money needed for assisting Ireland was relatively small compared to the capacity of the rescue fund.
Less than one-tenth of the fund was used for Ireland, the first country to benefit from the facility, he said.
The finance ministers met to discuss ways to strengthen the euro amid new concerns that the debt crisis in Ireland may spread to other debt-ridden countries such as Portugal and Spain and threaten the stability of the euro zone.
The borrowing costs of Portugal and Spain last week climbed to their highest level since the common euro currency was introduced eleven years ago as financial markets began speculating on their ability to service their debts.
The markets were calmed down after the European Central Bank purchased government debt, bringing down borrowing costs.
A proposal put forward by Juncker ahead of Monday's meeting for a common euro zone government bond to prevent rising borrowing costs found little support among the finance ministers.
"The idea is not so stupid as it sounds," he told journalists.
If all euro zone nations bundle together their government bonds, nations facing financial difficulties could benefit from Germany's credit-worthiness, will have to pay much less risk premium and may even escape a debt crisis, he explained.
Both proposals were rejected earlier on Monday by German Chancellor Angela Merkel as "unnecessary".
"I don't see any need to enlarge the fund," she told a news conference in Berlin. There are also no plans for a common government bond of euro zone nations, she said.
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