Merkel backs creation of an IMF-style rescue fund
Tuesday March 09 2010
German Chancellor Angela Merkel backed the idea of a European Monetary Fund yesterday and left open the possibility of helping Greece in future, while emphasising the country was not in an emergency now.
Her Finance Minister Wolfgang Schaeuble threw his support behind the idea of an IMF-style rescue fund for Europe at the weekend and earlier yesterday a European Commission spokesman said the executive was ready to propose setting up a new rescue fund for the eurozone.
Details
Ms Merkel said while details would have to be sorted out, the European Union needed to have a mechanism to help itself if it hit difficulties, even if it meant changing the EU treaty.
"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."
She said the euro was based on the two anchors of the "no bailout" clause under which no country can take on another eurozone state's debts, and the Stability and Growth Pact's fiscal deficit rules.
Ms Merkel also said she did not rule out taking action if Greece got into an "emergency situation" although she emphasised that this was not the case at the moment.
"The immediate inability to pay is, thankfully, not the case," said Ms Merkel.
"I cannot rule out anything, but the situation is not with us at the moment," she said, adding Greece's bond issue last week had gone well.
"Of course the spreads are wide. That is the assessment of the market. Ireland also has high spreads.
"As confidence grows in Greece, the spreads will narrow again," she said.
Irish Independent
