Euro bailout fund should be used for banks: France

The 500 billion euro ESM is intended to be used to help finance debt-ladened governments, not banks

French Finance Minister Pierre Moscovici said on Sunday that it would better to recapitalise troubled European banks using the ESM bailout fund than use government money.

"I think that to recapitalise banks it's better to go through direct mechanisms, what we call the ESM, the European Stability Mechanism, rather than to go through states," Moscovici said on LCI television.

"Once this mechanism is in place, things will be clearer and the situation will be calmer for a certain number of banks, including Spanish banks," he added.

The 500 billion euro ESM, which is due to come into force in the weeks ahead, is intended to be used to help finance debt-ladened governments and not banks.