Euro zone considers leveraging EFSF: EU's Rehn

WASHINGTON (Reuters) - The euro zone is exploring the possibility of leveraging its bailout fund, the European Financial Stability Facility, to better support euro countries, Economic and Monetary Affairs Commissioner Olli Rehn said.

Speaking at a seminar on the sidelines of the annual meetings of the International Monetary Fund, Rehn said this could only be explored once new operational powers for the EFSF are ratified by the 17 countries using the euro.

This is likely to happen by mid-October.

"Once that is done it is essential that we focus on both the long-term perspective of further fiscal integration and, in parallel, whether there are conditions to introduce some kind of euro bonds like the blue or red bonds -- partly European, partly national bonds," Rehn said.

"In the meantime we need to build a bridge and I think this bridge will be developed on the basis of the current reform of the EFSF and as one part of that next stage we are contemplating the possibility of leveraging the EFSF resources to have more firepower and thus have a stronger financial firewall to support our member states that are doing the right thing," Rehn said.

Billionaire investor George Soros, also present, said several ways of leveraging were being explored:

"Turning the EFSF into a bank is one, making it function as an insurance company could be another one, and using it to provide the first tranche of a guarantee, thereby relieving pressure on the others, could be yet another," Soros said.

"There are a number of options, and I am glad they are all being explored, because something needs to be done," he said.

(Reporting by Jan Strupczewski, Editing by Chizu Nomiyama )