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Euro watchdog plea

IMF chief Dominique Strauss-Kahn is pushing for the creation of a fiscal federation in the euro zone which would have much greater control over tax and spending issues in member states.

Mr Strauss-Kahn warned that without "fiscal federalism", Europe's single currency may not survive. He is proposing greater powers for the European Commission to police national economic policies or a separate, independent European institution, along the lines of the European Central Bank.

He accepted that the large bailout fund, put in place in May by Europe and the IMF to respond to the Greek budgetary crisis, was a temporary form of emergency assistance.