Paris, June 16 (Reuters): The Eurozone needs a common finance minister and should consider issuing region-wide bonds to help pull it out of its economic crisis, said Christine Lagarde, head of the International Monetary Fund.
“What is needed is a collective determination to advance towards a key stage in the development of the Eurozone,” Lagarde told daily Liberation in an interview published on Saturday.
“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 Eurozone 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 as Europe’s paymaster 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.