The head of the IMF has come out promoting the inevitability of a single EU fiscal policy – is now proposing creating short EU debt instruments that would eventually lead to true Eurobonds, and require a single fiscal policy. A giant step toward one-world currency anyone?
Thanks again to Mathieu for alerting us to this story. I couldn’t find any references to the announcement yet in the English speaking press, so I’m posting the Google translated version of the story below.
Via Google Translate:
IMF calls for introduction of Euro Bonds
The International Monetary Fund sees the danger of a solvency crisis and therefore maintains a profound fiscal union in Europe is urgently needed. A first step could be short-term government bonds, common (€-Bills). This should serve as a precursor to genuine euro bonds.
The International Monetary Fund (IMF) maintains a comprehensive fiscal policy integration in Europe is inevitable. At a press conference on Wednesday struck the chief economist of the IMF, Olivier Blanchard, the early creation of joint government bonds. Because time was not ripe for genuine euro bonds, should the Europeans with “Euro-bills” to begin. These short-term securities with a maturity of one year could alleviate the worst Finanzierungsschwierigekeiten especially the southern Stataten. Because obviously the most euro area countries will slip this year in an acute financial distress. Therefore, the IMF also wants a “deeper integration” on fiscal policy level. In a preview, writes the IMF: “Fiscal agreements have to be rescheduled in order to achieve a forward-looking risk-taking over.” “Anticipate very difficult financing conditions,” Without the assumption of the risks of individual States, by any other would have individual states. There was a risk that is out of “the liquidity crisis is a solvency crisis.” In the latest World Economic Outlook, the IMF even speaks officially for the first time the possibility of the breakup of the euro area (here).