Eurozone finance ministers, after hours of debates and bargains, agreed Friday in Copenhagen to boost the financial firewall to 800 billion euros (1.1 trillion U.S. dollars).

But analysts warn that the expansion, though enough to persuade the International Monetary Fund (IMF) to grant assistance in case of emergency, may not be enough to reassure markets.

Friday's decision came with no surprise and financial markets are expected to open with no turbulence Monday. Euro's exchange rate against the U.S. dollar gained a little Friday to 1.335, at the expectation of the meeting's result.

But doubts persist on whether the boost is strong enough to convince markets that further contagion of crisis will be contained. In the 800-billion-euro package, about 300 billion has been used or pledged and only 500 billion is classified as "readily available."

IMF IS KEY

The scale of 700 billion to 800 billion euros was aimed at obtaining permission for IMF funds, some analysts pointed out. The latest G20 ministers meeting held February in Mexico City called for the expansion of firewalls and set it as a precondition for gaining international assistance.

Sarah Hewin, Regional Head of Research for Europe at Standard Chartered Bank, pointed out that the scale was enough to persuade the IMF to increase its own resources, which might be the real point.

"So this could lead to a large enough bailout facility to meet the needs of Italy and Spain, should those countries run into difficulty," said Hewin.

"The aim with the bailout funds was that they should not need to be used -- by creating them, confidence would be underpinned so that countries could continue to borrow on the open market," she explained.

IMF chief Christine Lagarde congratulated eurozone finance ministers on the agreement but didn't give a clear answer to whether the expansion was enough for getting helps from the IMF.

"I welcome the decision of euro area ministers to strengthen the European firewall," Lagarde said in a statement.

"The IMF has long emphasized that enhanced European and global firewalls, together with the implementation of strong policy frameworks, are critical for ending the crisis and securing international financial stability," she said.

ENOUGH OR NOT

European financial markets gradually gained confidence after continued efforts of the EU, the IMF and the European Central Bank (ECB). And imminent danger of a Greek default seems to have vanished after the successful debt write-down last month. But potential dangers loom ahead.

First, Greek debt write-down may not be enough, some analysts warned, saying that it may even need a write-down of debts held by public sectors.

Second, market confidence is still weak. Recent rises of Portuguese and Spanish government bond yields illustrate that any bearish news may trigger market tensions.

In a report issued Tuesday, the Organization for Economic Co-operation and Development (OECD) called on the eurozone to boost the firepower of its bailout funds to at least 1 trillion euros to ensure it can meet the needs of any distressed nation.

"The European firewalls should be expanded further and made more credible to restore confidence," said the report.

"To ease market tensions, the funds should be available on a scale sufficient to withstand possible future requests for financial assistance," it said.

"We know that in fact three countries have needed to access bailouts, so the problem of contagion will not disappear," Hewin said.

"If Italy and Spain need bailing out, the situation will have deteriorated to such an extent that other countries could also need support, for example Belgium," she warned. (1 euro = 1.33 U.S. dollars)