18-Oct (CNBC) — Euro zone leaders are likely to agree to leverage their bailout fund at a summit on Sunday by allowing it to guarantee a portion of newly issued euro zone debt, euro zone officials and the expert who first developed the plan said on Tuesday.

Under the scheme, the European Financial Stability Facility (EFSF) [cnbc explains] would promise investors who buy Spanish, Italian, or other higher-risk euro zone sovereign debt [cnbc explains] at auction that it would cover a portion of any losses they made if the country were to default.

“This idea is the main contender,” one euro zone official said, but added there were other projects under consideration for how best to increase the EFSF’s firepower, with markets unconvinced it is big enough to handle the widening crisis.

[source]

PG View: I find it hard to believe that EFSF leveraging is truly making a comeback after it was essentially ruled out by Germany, but that could make for a big surprise this weekend.