Lagarde: “Why not” turn EU bailouts into a European Monetary Fund?
International Monetary Fund chief Christine Lagarde has given her backing to plans to transform the eurozone's bailout fund into a European Monetary Fund.
European Commission proposals – backed by the likes of Germany and France – would see the government-controlled European Stability Mechanism (ESM) transferred into the hands of the European Parliament.
A European Monetary Fund would be enshrined into EU law and would underpin the eurozone's bank resolution fund.
In an interview with Swiss newspaper Tages-Anzeiger, Lagarde said the eurozone's financial crisis showed the need for an "independent" crisis management system.
"Why not," she said in response to the current EC proposals.
What that mechanism is called is secondary. If one wants to call it European Monetary Fund, then please.
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Lagarde also dismissed suggestions the IMF's role has now been taken over by EU funding that has bailed out the likes of Ireland, Portugal and Greece.
“We do not serve a region but 189 countries. That also includes eurozone countries. And if together they decide that other crisis mechanisms like the ESM are involved, that is in order,” she said.
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