European Union mulls rescue fund

The European Commission has
confirmed that it may set up a version of the International Monetary Fund to
bolster the eurozone’s financial stability.

Germany and France are leading the
move, part of a series of initiatives aimed at avoiding a repeat of the sort of
financial crisis engulfing Greece.

The IMF monitors the economic
policies of member countries and can provide financial aid in the event of a

France and Germany have resisted
IMF involvement in Greece’s financial woes.

The willingness to create a new
agency reflects the aversion that euro governments have to the idea of IMF
involvement in the Greek crisis. They do not like the implication that they
can’t sort out their own problems themselves.”

Economic and Monetary Affairs
Commissioner Olli Rehn is meeting with the full commission executive about the
talks on the EMF plan today.

Full details of the EMF, and how
the 16 members of the eurozone would fund it, might be ready by early June, he

Weighed down by a deficit more than
four times the EU’s limit, Greece has initiated a number of austerity measures,
including sweeping tax rises and deep cuts in public spending.

The emergency action has sparked
protests and nationwide strikes that have affected air and ground transport, as
well as schools and hospitals.

It has also highlighted differences
in the 27-nation EU between the euro countries and those that have retained
their own national currencies.

Countries outside the euro have
greater leeway in managing their finances as they can devalue their money if
they so wish to help balance their books.