The European Commission will propose on December 6 the transformation of the European Stability Mechanism (ESM) into a European version of the International Monetary Fund (IMF), El Pais reported on Tuesday.

With an initial capital of €500bn and a capital boost of a further 20%. As a lender of last resort, the ESM will extend liquidity to Eurozone member states experiencing a sovereign debt crisis in exchange for liquidity.

The 47-page proposal, the ESM’s transformation is envisioned as one of the three pillars of reforms for the rebalancing of the Eurozone. The European fund will complement a Eurozone budget and a Eurozone minister of the economy.

The new agency will have a board of governors who will be the EU’s finance ministers and a board of directors that will continue to be chaired by the current ESM managing director, Klaus Regling.

Raising capital or bailing out a member will require unanimity. However, bailout amounts will be set on the basis of an 85% qualified majority vote. This means that the big four – Germany, France, Italy, and Spain – will be able to veto any such decision.