Greek crisis leads to calls for 'European IMF'

As European Union finance ministers meet in Brussels to try to work a solution to the Greek financial meltdown, Germany is again talking up the need for a European version of the IMF to tackle future Eurozone crises.

Officially the party line from Brussels remains that there is no need for immediate bailout action in Greece although behind the scenes the various parties are working on putting a safety net in place to reassure investors that Greece will not default on its debts and help lower the rate at which Greece is able to raise funds on international markets.

But the German Finance Minister Wolfgang Schaeuble is pushing hard for a new institution to be able to step in to deal with any future crises of this nature.
“The Eurozone aims at resolving its troubles on its own,” he said. “We are not planning an institution in competition with the International Monetary Fund but for the internal structure of the eurozone we need an institution that commands the experience of the IMF and similar executive powers.”

He added: "Strict conditions and a prohibitive price tag must be attached so that aid is only drawn in the case of emergencies that present a threat to the financial stability of the whole euro area," Schaeuble said. "Monetary penalties could be imposed immediately and, once the aid and cooling-off period end, enforced against the member state without any recourse to reclaim the fine.”

With EU leaders concerned that pressure brought on Greece by financial markets will spread to countries such as Italy, Portugal and Spain, he also called for more convergence among the Eurozone countries to present a united front against market speculators. “We cannot allow our joint currency to become a ball for international speculators to play with,” he said.

He admitted that the current crisis threatened the credibility of the entire Euro project, but insisted that the problem must be dealt with by Eurozone members.  Measures are necessary, he said, to strengthen the euro zone, "otherwise the USA and China won't take us seriously."