European answer to the International Monetary Fund? by Zivka Deleva

Worried about how to survive the economic crash that’s been provoked, lots of members of European Union started to think of a good way to help each other. European policymakers now examine the idea for constituting European answer to the International Monetary Fund. The aim is to urge help-receiving countries to make commitments that are going to guarantee that all the rescue fund is not in vain. The idea for a new Fond came from German Finance Minister Wolfgang Schaeuble. European politicians didn’t stay nonchalant on this issue, and different opinions could be heard these past few days. German politicians are spotty. Chancellor Merkel thinks that the idea is! “good and interesting”, but categorical that this new fond would only work if the spendthrift countries get punishments for their bad monetary attitude. “Without changing the [EU] treaty, it cannot be done. We would need a treaty change. If the European Union is to be capable of taking action, it will run into such questions. The EU treaty will not be the end of history. Then we would be in a static system. I don't want that I want Europe to respond to new situations." - said Merkel for Foreign Associated Press. Unlike her, Central Bank Chief’s Axel Weber finds this new fund “unhelpful”. According to French Economy Minister Christine Lagarde, this fund shouldn’t be a short-term priority for the Union. European Commission is still doubtful on this question, thinking that it is going to be very important to find the right form – this either is going to be only a financial instrument or it is going to be a new institutional! body. The biggest worm it seems for the Union is Greece. It ! is the m ost financially endangered country, which cried for help from her Euro-friends. Prime Minister Papandreou even had the courage to threaten EU that if it doesn’t help, Greece would turn to the IMF. Greeks debts are expected to top 290 billion euro this year, with a budget deficit of 12.7% od GDP, which is more than four times the EU limit.

by Zivka Deleva for SigEx Ventures (http://sigexventures.com)

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