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FT.com / Europe - Backing for EU insolvency pact
Germany's leading economic research institutes have thrown their weight behind Berlin's drive to persuade eurozone partners to agree on an insolvency mechanism for member states that are in effect bankrupt.

In a report to the government published on Thursday, the institutes said that merely reinforcing the rules of the eurozone's stability and growth pact - as proposed by the European Commission - would not be enough to prevent speculation against debt-laden member states from destabilising the currency union.

EU finance ministers are attempting to draft regulations to prevent any repetition of the recent crisis in the eurozone, triggered by Greece's debt problems.

The arguments from the heart of Germany's academic-economic establishment are likely to be used by Berlin in its efforts to persuade the rest of the European Union to set up a "crisis resolution mechanism" - an insolvency procedure in all but name - even if it means amending the EU's Lisbon treaty.

"Ce qui vient au monde pour ne rien troubler ne mérite ni égards ni patience." René Char
by Melanchthon on Fri Oct 15th, 2010 at 04:27:38 PM EST
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