EU needs common finance chief: Lagarde
Paris, June 17, 2012
The euro zone needs a common finance minister and should consider issuing region-wide bonds to help pull it out of its economic crisis, said International Monetary Fund head Christine Lagarde.
'What is needed is a collective determination to advance towards a key stage in the development of the euro zone,' Lagarde told daily Liberation in an interview.
'We have to go beyond monetary union to bring together budgetary policies, also with supervisory instruments for the financial sector in the wider sense and with mechanisms for resolving banking crises. All this would be under a euro zone authority and not national central banks.'
Mindful of the deepening crisis, EU leaders are meeting at a June 28-29 summit where they are expected to draw up a roadmap to fiscal union, but Lagarde's suggestions could raise eyebrows in Berlin.
Germany, which has shouldered the lion's share of the bloc's bailouts, insists fiscal union must be implemented before it would even consider more radical changes such as common bonds that would expose it to further fallout from the crisis.
Speaking as Greeks prepared to vote in an election that will shape the euro zone's future, Lagarde said it was important to raise the idea of a European treasury able to issue debt for the whole of the euro zone.-Reuters