The European Financial Stability Fund (EFSF) was introduced last year by the European Union to provide a financial safety net for eurozone countries in economic strife.

In the poll of 46 economists at banks across Europe conducted over the past few days, all but eight said the EFSF would need to be increased from its current 440 billion euros ($586 billion), with the median figure suggesting a boost to 700 billion.

Asked if the European Commission would increase the size of the EFSF, economists who said yes gave forecasts for the total fund size ranging between 500 billion and 2 trillion euros.

Some respondents said the fund's biggest limitation was its effective lending capacity. For the fund to maintain a top-notch credit rating, economists reckon just over half of the nominal 440 billion euros can be used readily for bailouts.

"The fact is you can't really go above around 250 billion euros without endangering the facility's triple-A credit rating," said Peter Dixon, economist at Commerzbank.

"There is a sense it needs to be bigger and stronger to meet any further claims that may be made upon it."

Analysts say in its current form the fund would not be enough to rescue both Spain and Portugal if they bow to debt market pressure and seek aid.

Portugal will need an EU-led bailout at some point similar to those handed out to Ireland and Greece last year, according to a large majority of economists polled by Reuters earlier this month. Seven of 51 said Spain would also seek help.

Eurozone finance ministers will discuss an increase to the fund's effective lending capacity, though France said it would be March before a firm plan was in place.

"We believe the meetings are unlikely to deliver any new resolution at this stage, given the complexity of the issues involved," said RBS economist Silvio Peruzzo in a research note.

Any decision is likely to be postponed at least until a meeting of EU government heads on Feb. 4, he said.

EXTENDING THE SCOPE

German Chancellor Angela Merkel, head of Europe's biggest economy, said last week her country would stand by the euro and do whatever was necessary to ensure it remains stable. On Monday, German Finance Minister Wolfgang Schaeuble ruled out bolstering the size of the fund in the near term.

French Economy Minister Christine Lagarde said on Friday governments were looking at increasing the rescue fund, as well as extending its scope to buy bonds directly on debt markets.

Proponents of government bond purchases say it could help pre-empt developments in the fight against contagion, instead of the fund springing to action only when a crisis has developed. It currently takes around 6-8 weeks for the fund to provide support from first request.

Respondents in the poll said the EFSF has been moderately effective, scoring it a median of six where one was least effective and ten highly effective. Answers ranged from two to eight.

The fund is expected to make its debut debt issue this week, and if it draws robust demand it would give some support to peripheral debt, traders said on Monday. Portugal and Spain both held relatively successful bond auctions last week, but were forced to offer interest rates well above those seen at previous auctions.