Posted by: Ben Vickers on December 2, 2011
The European Central Bank may have found a way around the restrictions on it helping fund euro member governments: national central banks will give money to the International Monetary Fund and ask them to do the job. As James Neuger reports:
A European proposal to channel central bank loans through the International Monetary Fund may deliver as much as 200 billion euros ($270 billion) to fight the debt crisis, two people familiar with the negotiations said.
This would appear to be part of the “other elements” ECB President Mario Draghi told lawmakers yesterday in Brussels might follow a “new fiscal compact” to help restore credibility of the euro zone.
This plan would allow France and Germany to put aside their differences on the role of the ECB for now, and concentrate on the tighter fiscal rules German Chancelllor Angela Merkel is demanding. The plan may push dissent over the technicalities of how to help fund struggling euro members into the background at the Dec. 9 leaders’ summit, and allow for a stronger consensus on budget rules.
The question that remains is how much money pledged through this route will convince investors that the euro zone will remain intact.
Photographer: Hannelore Foerster/Bloomberg