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The news was announced by the European Union President, Herman van Rompoy.

"We reconfirmed the operational features of the permanent stability mechanism. We will make sure that EUR 500 B is available," van Rompuy said.

The ESM is to replace the European Financial Stability Facility (EFSF), a temporary bailout fund set up in May 2010 by the cabinets of countries in the Eurozone, whose fiscal assets reach EUR 440 B. ESM is expected to become operational in July 2013.

The joint assets of the ESM will be EUR 700 B.

ESM has the goal to secure financial stability in the Eurozone.

Rompoy further stated the possible reexamination of the conditions for financial assistance to Ireland would be discussed after a test for the stability of Irish banks.

The President of the European Commission, Jose Manuel Barroso, said the possibility of a bailout for Portugal is not on the table.

"It is sure that whatever would be the next government, all the commitments in terms of the fiscal targets would be respected," he stated.

Portuguese Prime Minister Jose Socrates resigned Wednesday night after the country's parliament voted against his latest austerity-measure plan. Following the resignation the Fitch credit rating agency downgraded Portugal's creditworthiness from A+ to A.

EU leaders failed to agree on how to raise the effective lending capacity of the EFSF to EUR 440 B from EUR 250 B. The promise is for the increase to be in place in June.

Tags: European Commission, Jose Manuel Barroso, bailout, Portugal, Herman van Rompuy, European Financial Stability Facility, EFSF, European Stability Mechanism, ESM, Eurozone