More like this
IMF calls for enlarged EU bail-out fund
€500bn fund not enough to cope with potential crisis in eurozone
The IMF has called for the European Union to increase its €500bn bail-out fund and step up bond purchases to insure against a new financial crisis in the eurozone periphery.
“The recovery could still stay the course, but this scenario could now easily be derailed by the renewed financial market turmoil,” the IMF says in a report for eurozone finance ministers. “The sovereign and financial market storm affecting the periphery constitutes a severe downside risk.”
With the economies of Spain and Italy starting to come under pressure, the IMF said that €500bn would not be enough to cope with the potential fallout. “There is also a strong case for increasing the resources available for this safety net and making their use more flexible, including for the purpose of providing more effective support to banking systems,” it said.
Dominique Strauss-Kahn, head of the IMF, was due to present the report today.
Read a full report at the Telegraph. ·
Comments are now closed on this article
Comments
It is interesting to see the world's top financial brains squirming on the hook of the blindingly obvious. Greece had very socialist spendthrift habits which led to the crisis. It covered up its debts to get into the euro, and then carried on spending even more on cheap euro interest rates. It is not a money crisis or a euro crisis, it is a socialist spending crisis. But the whole EU is socialist, so it is hard to tell the difference unless you know a little economics. (In Greece it is mainly the fault of the 'socialist' PASOK party, but they are virtually all socialists in Greece, as in the UK, with the LibLabCon-ConDem socialist pseudo-choice we get at elections now.) So of coure the socialist spending of the Greeks reduced them to begging bowl status to the European Central Bank, the IMF, and the bureaucrats of Brussels. They are told what to do, but they carry the can with the Greek voter, insofar as the Greek vote still means anything. Then the spendthrift socialist Irish find themselves in the same boat, deja vu as they say in Brussels. Now the fear sets in...socialist Spain and Portugal are waiting with their begging bowls, but they are much bigger than the first two, so they will break the bank...the EC bank that is. Serves them all right. Shame we were so stuffy and isolated in Great Britain and retained the pound, eh?