French President Nicolas Sarkozy promised on Sunday (7 March) that eurozone countries would help Greece if its financial problems worsened. Meanwhile, German Finance Minister Wolfgang Schaeuble said he plans to make proposals soon on a new European institution to help ensure the stability of the euro zone. Sarkozy was speaking after talks with Greek Prime Minister George Papandreou, who is looking to secure pledges of support from European capitals that will reassure markets and lower the debt-stricken country's high borrowing costs. "If Greece needs help, we will be there," Sarkozy said at a joint news conference.
Sarkozy was speaking after talks with Greek Prime Minister George Papandreou, who is looking to secure pledges of support from European capitals that will reassure markets and lower the debt-stricken country's high borrowing costs.
"If Greece needs help, we will be there," Sarkozy said at a joint news conference.
The European Commission has re-affirmed its willingness to come forward with a proposal for a European Monetary Fund, opening a Pandora's Box of questions regarding its potential design. "The commission is ready to propose such a European instrument for assistance, which would require the support of all euro area member states," the commission's economy spokesman, Amadeu Altafaj Tardio, said during a regular news conference on Monday (8 March) in Brussels. The college of 27 commissioners is set to have their first discussion on a potential European fund at their weekly meeting being held in Strasbourg this Tuesday.
"The commission is ready to propose such a European instrument for assistance, which would require the support of all euro area member states," the commission's economy spokesman, Amadeu Altafaj Tardio, said during a regular news conference on Monday (8 March) in Brussels.
The college of 27 commissioners is set to have their first discussion on a potential European fund at their weekly meeting being held in Strasbourg this Tuesday.
So here they make the biggest governance proposal in the history of the euro, and it looks like they messed it up. A treaty change is needed to implement Schauble's proposal, as Merkel now admits and the French also think it is not realistic. Schauble's big proposal is in the process of being relegated as a long term goal. The FT quotes Angela Merkel as saying that she supports the plan, especially the independence from the IMF, but she does not think it is realistic right now. The FT quoted Merkel as saying she thought the plan was "interesting". It is obviously not her plan.
What's the problem with such a treaty? Could be done within the Eurozone or would it have to include all 27 member states? The idea obviously would require a new treaty of some sort.
a full-scale negotiation of the EU's 27 member states would be needed to set up a European Monetary Fund, which would be able to bail out eurozone members subject to strict budgetary conditions. "Without treaty change we cannot found such a fund," Ms Merkel told foreign correspondents in Berlin on Monday. Any new Europe-wide treaty risks being hugely divisive so soon after the lengthy and painful ratification of the Lisbon treaty, which was initially rejected by a referendum in Ireland and only came into effect in December. Paris and Berlin were struggling to come up with a common line on the German initiative and the question of the need for treaty change has exposed differences between them. French officials welcomed the proposal for an EMF in principle, but warned it would probably require an overhaul of existing treaties, for which there is no desire in Paris. They see it as a long-term project.
a full-scale negotiation of the EU's 27 member states would be needed to set up a European Monetary Fund, which would be able to bail out eurozone members subject to strict budgetary conditions. "Without treaty change we cannot found such a fund," Ms Merkel told foreign correspondents in Berlin on Monday.
Any new Europe-wide treaty risks being hugely divisive so soon after the lengthy and painful ratification of the Lisbon treaty, which was initially rejected by a referendum in Ireland and only came into effect in December.
Paris and Berlin were struggling to come up with a common line on the German initiative and the question of the need for treaty change has exposed differences between them.
French officials welcomed the proposal for an EMF in principle, but warned it would probably require an overhaul of existing treaties, for which there is no desire in Paris. They see it as a long-term project.
From the FT article (not by Munchau) referenced by Eurointelligence.
German finance minister to present fund proposals soon. The European Commission has said it supports creating a European Monetary Fund (EMF) to help eurozone countries facing balance-of-payments difficulties. "The Commission is ready to propose such a European instrument for assistance, which would require the support of all euro area member states," a spokesman for Olli Rehn, the European commissioner for economic and monetary affairs, said. He said the Commission would present a formal proposal in the "next few months".
The European Commission has said it supports creating a European Monetary Fund (EMF) to help eurozone countries facing balance-of-payments difficulties.
"The Commission is ready to propose such a European instrument for assistance, which would require the support of all euro area member states," a spokesman for Olli Rehn, the European commissioner for economic and monetary affairs, said.
He said the Commission would present a formal proposal in the "next few months".
Supporters might reply that an EMF would deal with the "next Greece," rather than fix the current mess, but markets will inevitably see the message as weak and confused. No wonder speculators are salivating. No wonder Axel Weber, president of the Bundesbank, would prefer everybody to shut up. Discussions about "the institutionalisation of emergency help," he declared , are "unhelpful". Weber has a point. Most of the voices arguing in favour of an EMF are German. Other European states - especially smaller countries - will be suspicious. They might, in theory, welcome the creation of a fund that could help in a crisis. In practice, they will view the manoeuvre as a way for Germany to impose fiscal restrictions on its neighbours while neglecting to get its consumers spending again.
Weber has a point. Most of the voices arguing in favour of an EMF are German. Other European states - especially smaller countries - will be suspicious. They might, in theory, welcome the creation of a fund that could help in a crisis. In practice, they will view the manoeuvre as a way for Germany to impose fiscal restrictions on its neighbours while neglecting to get its consumers spending again.
