Brussels looks to expand the fund to help countries in trouble
Rehn recognize that they are "thinking" about the need to strengthen the instruments to the crisis. -The BBC unveiled a project to increase its funding to two billion euros.Europe is taking receipt of the glove launched last week from Washington by the International Monetary Fund (IMF) and the U.S. Government. The Monetary Affairs Commissioner, Olli Rehn, has admitted today that it is considering whether to strengthen the European fund to rescue the euro, as he called for the institution headed Christine Lagarde and Secretary U.S. Treasury Timothy Geithner.In a statement published by the online edition of the newspaper Die Welt, Rehn said that being considered "the possibility of giving the European Financial Stability Fund (EFSF) additional powers to allow you more strength." Olli Rehn, who did not go into details but the BBC talks to increase its funding to two billion euros, stressed that the measure would complement the expansion of rescue umbrella decided last July.
Rehn also warned against a new banking crisis in the old continent and stressed the need for further recapitalization of financial institutions. "It would be very difficult to avoid infection. The wealth of Germany is based on a stable euro and stable partner," stressed Rehn. "The current crisis is a serious combination of a state debt crisis and the weaknesses of the banking system. You can not solve one without the other. We must address both," he summarized.
Regarding the urgent need to recapitalize banks, Rehn is convinced that an agreement will be reached soon within the EU and says "be sure that the finance ministers will address
the item in its appointment within a week. "After noting that the euro countries have taken steps to protect its weaker banks before the crisis, points out that, however," it is clear that more must be done "." We need to extend the repair work in the area by a stronger financial recapitalization of the banks to reduce the risks of a credit jam and thus a higher turbidity of the situation as it is showing in Europe and America, "added Commissioner .
On the possibility of extending the fund, the BBC reports today that the EU even last a project expected to reach two billion euros from the current 440,000 million. As the chain adds, European states hope to have the plan within five or six weeks, although the BBC admits it will be very difficult to make it happen. The measure also would provide a 50% off the debt of Greece, and elsewhere in the same, is committed to strengthening eurozone banks with capital to absorb losses.
For this plan can be carried out, would allow the European Central Bank (ECB) provide loans along with the background. The EFSF assume the higher risk, lending to states in distress and thereby reduce the risks to the ECB.
"Greece does not have to fall and will not become insolvent. Although now is the moment of truth for the country and this is the last chance to avert the collapse of the Greek economy," warned Rehn.
In an unusual warning, the U.S. Treasury secretary, Timothy Geithner on Saturday pushed the ECB to take a crucial role in the fight against the crisis. "The threat of a cascade of defaults, bank closures and catastrophic risks should be removed from the table," said the IMF board.
The pressure increased on Sunday when a senior IMF said the European Central Bank was the only player strong enough to "make an example" to financial markets and prevent the debt crisis in the euro zone further damage global economy.
The IMF said the rescue mechanism of the European Union alone could not carry the responsibility for resolving the crisis.
"It's very important that we see a combination of the ECB and the EFSF", as explained to Reuters Antonio Borges, head of the European Department of IMF. "The ECB is the only agent that can really give a warning to the markets," he said. Investors fear that Greece would fall into a suspension of payments and fear that the authorities can not prevent the crisis spreading to other nations largest euro zone.
Rehn recognize that they are "thinking" about the need to strengthen the instruments to the crisis. -The BBC unveiled a project to increase its funding to two billion euros.Europe is taking receipt of the glove launched last week from Washington by the International Monetary Fund (IMF) and the U.S. Government. The Monetary Affairs Commissioner, Olli Rehn, has admitted today that it is considering whether to strengthen the European fund to rescue the euro, as he called for the institution headed Christine Lagarde and Secretary U.S. Treasury Timothy Geithner.In a statement published by the online edition of the newspaper Die Welt, Rehn said that being considered "the possibility of giving the European Financial Stability Fund (EFSF) additional powers to allow you more strength." Olli Rehn, who did not go into details but the BBC talks to increase its funding to two billion euros, stressed that the measure would complement the expansion of rescue umbrella decided last July.
Rehn also warned against a new banking crisis in the old continent and stressed the need for further recapitalization of financial institutions. "It would be very difficult to avoid infection. The wealth of Germany is based on a stable euro and stable partner," stressed Rehn. "The current crisis is a serious combination of a state debt crisis and the weaknesses of the banking system. You can not solve one without the other. We must address both," he summarized.
Regarding the urgent need to recapitalize banks, Rehn is convinced that an agreement will be reached soon within the EU and says "be sure that the finance ministers will address
the item in its appointment within a week. "After noting that the euro countries have taken steps to protect its weaker banks before the crisis, points out that, however," it is clear that more must be done "." We need to extend the repair work in the area by a stronger financial recapitalization of the banks to reduce the risks of a credit jam and thus a higher turbidity of the situation as it is showing in Europe and America, "added Commissioner .
On the possibility of extending the fund, the BBC reports today that the EU even last a project expected to reach two billion euros from the current 440,000 million. As the chain adds, European states hope to have the plan within five or six weeks, although the BBC admits it will be very difficult to make it happen. The measure also would provide a 50% off the debt of Greece, and elsewhere in the same, is committed to strengthening eurozone banks with capital to absorb losses.
For this plan can be carried out, would allow the European Central Bank (ECB) provide loans along with the background. The EFSF assume the higher risk, lending to states in distress and thereby reduce the risks to the ECB.
"Greece does not have to fall and will not become insolvent. Although now is the moment of truth for the country and this is the last chance to avert the collapse of the Greek economy," warned Rehn.
In an unusual warning, the U.S. Treasury secretary, Timothy Geithner on Saturday pushed the ECB to take a crucial role in the fight against the crisis. "The threat of a cascade of defaults, bank closures and catastrophic risks should be removed from the table," said the IMF board.
The pressure increased on Sunday when a senior IMF said the European Central Bank was the only player strong enough to "make an example" to financial markets and prevent the debt crisis in the euro zone further damage global economy.
The IMF said the rescue mechanism of the European Union alone could not carry the responsibility for resolving the crisis.
"It's very important that we see a combination of the ECB and the EFSF", as explained to Reuters Antonio Borges, head of the European Department of IMF. "The ECB is the only agent that can really give a warning to the markets," he said. Investors fear that Greece would fall into a suspension of payments and fear that the authorities can not prevent the crisis spreading to other nations largest euro zone.
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