EurActiv.com Correspondent's Choice

This story about an EMF was published by EurActiv on 9th March 2010.

German Chancellor Angela Merkel gave her backing on Monday (8 March) to a proposed European Monetary Fund to rescue ailing eurozone member countries but warned this would mean changing the European Union treaty.

Germany’s Finance Minister Wolfgang Schaeuble threw his support behind the idea of an IMF-style rescue fund for Europe at the weekend, suggesting that countries with budget difficulties such as Greece could tap into it in future.

The European Commission said on Monday it was working with Germany, France and other European countries on the plans but a spokesman said it was too early to say whether the fund would be just a financial instrument or a new institutional body with its own staff and budget.

In Berlin, Merkel said that while details would have to be sorted out, the European Union needed to have a mechanism to help itself if it hit difficulties, even if it meant changing the EU treaty.

“I think the idea [of a European Monetary Fund] is a good one,” Merkel told Berlin-based journalists at the Foreign Press Association, adding issues such as who would contribute and how independent it would be still have to be looked at.

“Without changing the [EU] treaty, it cannot be done. We would need a treaty change,” she said. “If the European Union is to be capable of taking action, it will run into such questions,” she added. “The EU treaty will not be the end of history. Then we would be in a static system. I don’t want that, I want Europe to respond to new situations.”

She said the euro was based on the two anchors of the “no bailout” clause – under which no country can take on another eurozone state’s debts – and the Stability and Growth Pact’s fiscal deficit rules.

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