Main focus of Wednesday, March 10, 2010

Dispute over European Monetary Fund

Germany's proposal of founding a European Monetary Fund (EMF) has triggered a dispute between politicians and banks. While the European Commission is considering setting up such an institution the leaders of the Eurozone's central banks are against the idea. The Fund could help crisis-stricken Eurozone countries, the press writes, but strengthening existing institutions could also prove worthwhile.

De Volkskrant - Netherlands

The idea of a European Monetary Fund should be taken seriously, writes the left-liberal daily De Volkskrant: "The Greek crisis has shown that Europe lacks instruments when one of the Eurozone countries gets into difficulties and needs some form of help. European politicians rightly hold the strong view that one cannot stand idly by when a Eurozone country is facing bankruptcy. The risk is too high that then other weaker Eurozone countries could get into trouble and the euro itself would be called into question. ... Can the [International Monetary Fund] IMF not intervene in such cases? There are arguments to support this: The IMF has already proven its worth in this area and Europe has little need of a new, expensive body. Yet Europe must be in a position to solve its own problems in the long term." (10/03/2010)

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Expansión - Spain

The Greek debt crisis could be a chance for Europe, writes business paper Expansión: "Crises force change. And the Greek crisis that has hit the Eurozone could turn into an unexpected opportunity to improve the foundations and the government of the single European currency. ... The surprising thing is that it was Germany, which up to now had always been reluctant to establish a political counterweight to the European Central Bank, that proposed the creation of the European Monetary Fund. The only explanation is that with this initiative it wanted to pre-empt other, more political and more ambitious alternatives preferred by France." (10/03/2010)

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The Guardian - United Kingdom

Instead of a European Monetary Fund, what the Eurozone really needs is effective institutions, writes The Guardian: "If an EMF is ever set up (a big if, given that it could force the renegotiation of the Lisbon treaty), it will probably not be so useful. It is more likely to go in for finger-wagging at governments that exceed their borrowing limits, and it is certainly hard to see German voters funding such an institution and its war chest. If that is what Ms Merkel has in mind, she should be warned: it will do nothing to glue together a eurozone that is slowly coming unstuck. If a 16-nation economic club is to grow up, it needs serious institutions and regulators - and for member governments to recognise that they are in it together." (10/03/2010)

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