European IMF-style rescue fund plans taking shape

13:27, March 10, 2010      

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The Pandora's Box of questions ensue regarding the potential design of the European version of IMF-like rescue fund after the idea was proposed.

The college of 27 commissioners had their first discussion on a potential European fund Tuesday at their weekly meeting held in Strasbourg.

Out of the meeting room, German Chancellor Angela Merkel said a possible new fund to support euro zone countries would not weaken European Union rules on budget discipline, after warning Monday that such a fund would need a new EU Treaty, which could take years to put together.

The doomed longtime travail in materializing such an institution was visibly snubbed by France's economy minister.

"The proposal ... is an interesting idea," said Christine Lagarde Tuesday, adding that the idea "does not appear to me to be an absolute priority in the short term."

But blunt words still await the idea that emerged as a result of debt crisis in Greece.

European Central Bank Executive Board member Juergen Stark fiercely criticized the idea, saying a fund would break penalize countries with solid finances and encourage wayward spending.

Source: Global Times
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