Euro zone ministers to meet to discuss rescue fund

| December 6, 2010 | 0 Comments
Euro zone ministers to meet to discuss rescue fund

A meeting today of euro zone finance ministers is expected to see pressure mount to boost the EU rescue fund in light of the debt crisis.

The recent Irish bailout has done little to allay fears and speculation has been mounting that other weaker euro zone economies may need financial aid.

Dominique Strauss-Kahn, chief of the International Monetary Fund (IMF) is today expected to call on ministers to boost the rescue fund and suggest the European Central Bank (ECB) increase its programme of buying Government bonds in order to prevent the crisis from spreading.

According to the IMF, the multi-billion euro fund needs to be increased as other nations start to come under pressure.

“There is also a strong case for increasing the resources available for this safety net and making their use more flexible, including for the purpose of providing more effective support to banking systems,” said the IMF.

Meanwhile, a report by the IMF suggests the recovery in the euro zone could “easily be derailed” by fresh market turmoil and it will today argue its case for increasing the size of the rescue fund.

In other news today, Spain’s finance minister has insisted that the country will not follow Greece and Ireland and seek a bailout.

In a newspaper interview, Elena Salgado said: “Our fiscal adjustment is on track… we have done all the things that we had to do with our financial sector.”

She added that Spain is “absolutely not” seeking a rescue.

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