FRANKFURT (MNI) – It is “premature” to discuss the future size of
the European Financial Stability Facility (EFSF) or whether the rescue
fund will be used to buy back sovereign Eurozone debt, French Finance
Minister Christine Lagarde said in a newspaper interview published
Tuesday.
Talking to the International Herald Tribune, Lagarde said Eurozone
finance ministers would have “a comprehensive range of tools and
decisions” to address the sovereign debt crisis when European Union
heads of state meet to discuss economic policies in March.
Furthermore, Lagarde underlined that the next round of bank stress
tests would be more “credible” than those conducted in July.
“We need to improve the overall credibility of the process, and
that includes communication, range, scope, a combination of bottom up,
top down quality control,” the minister said.
Lagarde rejected the term “transfer union” — a concept that is
anathema in Germany. “If you start to use certain concepts and words, it
begins to infuriate some people,” she said. “The approach that we try to
have is to move collectively. It’s going to be a give and take process.
We can’t talk about the give unless we know about the take.”
She hesitated to use the term “harmonization,” saying: “I wouldn’t
use ‘harmonization’ yet until we’ve come closer.”
Lagarde called for a multi-polar currency system, which “would help
give a better balance of reserves and a better reflection of
fundamentals in exchange rates everywhere.”
Lagarde declined to discuss a possible successor to current
European Central Bank President Jean-Claude Trichet for fear that such
talk could turn him into a “lame duck.”
“Beginning a discussion about his succession might undermine his
authority,” Lagarde warned.
— Frankfurt bureau: +49-69-720-142; email: frankfurt@marketnews.com —
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