France seeks ‘better options’ to European fund
French Finance Minister Christine Lagarde said a European Monetary Fund may not be the best way to support fiscally distressed countries, marking a potential split with Germany in the wake of the Greek financing crisis.
“A polemical debate on this wouldn’t be helpful right now,” Lagarde told reporters in Paris today. Consideration shouldn’t be “limited to a European Monetary Fund,” she said.
“Other ideas need to be studied and those that respect the Lisbon treaty are much preferable.”
German Finance Minister Wolfgang Schaeuble said in an interview with the Welt am Sonntag newspaper on March 8 that the euro region should consider creating an organization with powers similar to the International Monetary Fund.
The European Commission, the European Union’s executive body, said yesterday it would prepare a proposal on such a fund by the end of June.
Chancellor Angela Merkel said the EMF proposal is “good and interesting,” yet questions remain.
These include how independent the fund would operate from the commission and how sanctions would be applied to transgressors at the same time as they receive funds, Merkel told reporters in Berlin yesterday.
The idea for a fund was put forward last month by Deutsche Bank AG Chief Economist Thomas Mayer and Daniel Gros, director of the Centre for European Policy Studies in Brussels.
It comes after financial turmoil sparked by a soaring Greek budget deficit highlighted the absence of a single euro-area Finance Ministry that could tackle the default of a member state or force a country to trim its deficit.
Lagarde said that she wants “very quick” new rules on credit-default swaps.