Boost rescue fund needed

11:00, December 07, 2010      

Email | Print | Subscribe | Comments | Forum 

Eurozone finance ministers, meeting Monday, will face pressure to increase the size of a 750 billion euro ($997.4 billion) safety net for crisis-hit members in order to halt contagion in the single currency bloc.

Dominique Strauss-Kahn, the head of the International Monetary Fund (IMF), will call on the ministers to increase the fund and urge the European Central Bank (ECB) to step up its purchases of bonds to stem the crisis, according to an IMF report obtained by Reuters.

The IMF report and the situation in European debt markets will be discussed at length, a eurozone source said Monday at the regular meeting of the entire "Eurogroup."

That will be followed by a meeting today of ministers from the 27-nation European Union, who are expected to formally approve an 85 billion euro ($113.04) aid package for Ireland and discuss the reform of EU budget rules.

Bond-buying by the ECB helped calm markets at the end of last week. It also helped lower the borrowing costs of countries such as Portugal, Spain and Italy, which have come under intense market pressure in recent weeks.

But that may have been only a temporary respite for the 16-nation currency bloc, which some experts believe may not survive in its current form if the debt crisis rages on much longer.

Ewald Nowotny, a member of the ECB governing council, said on Austrian television that the eurozone economy had become so closely intertwined that splitting off peripheral states with debt problems would be counterproductive.

"Europe has already grown together so much that an amputation would have massive disadvantages for both sides," he said.

Luxembourg's prime minister, Jean-Claude Juncker, and Italian Finance Minister Giulio Tremonti called for the issuance of joint European sovereign bonds - or "E-bonds" - to assert the "irreversibility of the euro."

The pair, in a column published in Monday's Financial Times, said the creation of a European Debt Agency, that could issue such bonds, would be possible as early as this month if the body that represents member states endorses it.

Source: Global Times


  • Do you have anything to say?


Special Coverage
  • Premier Wen Jiabao visits Hungary, Britain, Germany
  • From drought to floods
Major headlines
Editor's Pick
  • Models present cheongsams designed by Chen Yanqin during a fashion show in Yantai, east China's Shandong Province, Sept. 30, 2011. More than 100 creations of cheongsams, a traditional Chinese women's dress also known as mandarin gown or Qipao, were displayed here Friday. (Xinhua/Li Mingfang)
  • Citizens watch fireworks exploding over the Jingtian Lake during a music firework show in Shanghai, east China, Sept. 30, 2011, on the eve of the National Day. (Xinhua/Pei Xin)
  • A member of the media takes a look at a Bluecar, an electric-powered car made by French company Bollore, at a media presentation in Vaucresson, west of Paris, yesterday. The Bluecars have a range of 250 kilometers in urban use and a maximum speed of 130km per hour, and will be available to rent in the streets of Paris under the name of Autolib. The four-seater Bluecars will be positioned at 1,200 stations in the French capital, where customers can pick them up and drop them off, and will be available around the clock. Users must have a valid driver's license and pay a subscription fee to borrow one of the vehicles.
  • Tourists watch a performance about an ancient court trial. (Photo/Xinhua)
  • U.S. President Barack Obama (4th L, front) shakes hands with outgoing Chairman of the Joint Chiefs of Staff Admiral Mike Mullen (1st R, front) as Vice President Joe Biden (3rd L, front), Secretary of Defense Leon Panetta (2nd L, front), and Army General Martin Dempsey (1st L, front) look on during the Chairman of the Joint Chief of Staff Change of Responsibility Ceremony at Joint Base Myer-Henderson Hall in Arlington, the United States, Sept. 30, 2011. Army General Martin Dempsey succeeded Mike Mullen to become the 18th Chairman of the Joint Chief of Staff on Friday. (Xinhua/Zhang Jun)
  • Chinese national flag guards escort the flag across the Chang'an Avenue in Beijing, capital of China, Oct. 1, 2011. More than 120,000 people gathered at the Tian'anmen Square to watch the national flag raising ceremony at dawn on Oct. 1, in celebration of the 62th anniversary of the founding of the People's Republic of China. (Xinhua/Luo Xiaoguang)
Hot Forum Discussion