Proposal for European Monetary Fund Wins EU Support

[pampango]

Source: Spiegel

German Finance Minister Wolfgang Schäuble has won support from EU Economic and Monetary Affairs Commissioner Olli Rehn for a proposal to set up a European monetary fund to tackle debt crises such as the one in Greece. Germany and other euro zone countries have said Europe should handle the Greek crisis without outside help.

"The euro zone aims to be able to solve its problems itself," Schäuble said. "Accepting financial help from the International Monetary Fund would in my opinion be an admission that the euro zone countries cannot solve their problems alone." Other members of Chancellor Angela Merkel's center-right coalition welcomed Schäuble's proposal, as did the opposition center-left Social Democrats, who said it was their idea.

Meanwhile, the governor of the Greek central bank, George Provopoulos, said Greece would not need foreign help to deal with its problems. Provopoulos told the Financial Times Deutschland that strong demand for a 10-year, €5 billion ($6.8 billion) bond Greece sold last Thursday showed Athens was capable of raising the funds it needs on the financial markets.

But he added that if Greece needed foreign help, it should come from Europe rather than the IMF. "Greece is part of the euro family and if help were necessary, that should be the euro zone's job," he said. Greece last week presented a €4.8 billion ($6.52 billion) austerity package to reduce its deficit. It blamed market speculators, who are betting on a possible Greek default, for pushing up the cost of its borrowing.



Read more: http://www.spiegel.de/international/europe/0,1518,682296,00.html

[HeresyLives]

1. An EU central bank.

About time.