BEIJING (MNI) – Eurozone nations should establish a mechanism to
allow for cross-border fiscal transfers between member nations in order
to avoid a repeat of the recent crisis, International Monetary Fund
Managing Director Dominique Strauss-Kahn said in comments published
Wednesday.
Strauss-Kahn told the Financial Times that his proposal would
involve short-term budgetary transfers rather than any permanent
arrangement and appears designed to allow for debt-burdened euro-zone
members to receive quick injections from their more liquid peers.
“What you need is stronger surveillance and tools to organise
transfers from one part of the area to other parts,” he said.
The report noted that Olli Rehn, the EU’s monetary affairs
commissioner, will today put forward similar proposals for fiscal and
economic policy co-ordination and that members will be urged to submit
their annual budgets for review by other members ahead of them becoming
law.
An EU policymaker, who was not identified, was quoted as saying
that “this is a not a matter of interfering with national sovereignty.
It is about checking the assumptions on which budgets are based. A lot
of the problems the euro area has had in the past have come from poorly
based assumptions.”
Eurozone leaders remain determined to reinforce the stability and
growth pact which limits budget deficits and public debt levels, the
report said.
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