European version of IMF being considered

The European Commission had confirmed that it may set up a version of the International Monetary Fund to help boost the eurozone's financial stablity. The call comes as part of a series of initiatives aimed at avoiding a repeat of the sort of financial crisis currently engulfing Greece.

Germany and France are leading the calls for the move, having already resisted the IMF's involvement in Greece's financial woes. The IMF monitors the economic policies of member countries and can provide financial aid in the event of a crisis.

According to reports on the BBC by economics correspondent Andrew Walker, "Support for a European Monetary Fund (EMF) seems to have been prompted by the Greek financial crisis, though it could not be up and running anything like soon enough to deal with that problem.

"It is more about dealing with, or preferably preventing, the next crisis within the euro area."

There are concerns, however, that the creation of a new agency, which analysts believe reflects the aversion that euro governments have to the idea of IMF involvement in the Greek crisis, could future worries for the eurozone. 

The German finance minister, Wolfgang Schauble, for instance, said at the weekend that, "for the internal stability of the eurozone, we need an institution that has the experience and power of the IMF".

The plan now is for Economic and Monetary Affairs Commissioner Olli Rehn to  inform the full commission executive on Tuesday about the talks on the EMF plan. In fact, full details of the EMF, and how the 16 members of the eurozone would fund it, might be ready by early June, according to Mr. Rehn's spokesman.

Protests

However, the emergency action has sparked protests and nationwide strikes that have affected air and ground transport, as well as schools and hospitals - as well as differences in the 27-nation EU between the euro countries and those that have retained their own national currencies.

This is because 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.

Matthew Buttell

Matt Buttell graduated from Bath Spa University in 2006. Since then he has written for several publications, before moving to the web. He now writes solely for the internet, continuing to cover key business issues while managing his own personal blog.

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