SZ: Schaeuble eyeing ‘European Monetary Fund’ for over-indebted EZ members; default clause included
Suddeutsche Zeitung on Sunday reported that powerful German Finance Minister Wolfgang Schaeuble is promoting the creation of a “European Monetary Fund” which will, according to the same report, act as a lender to the Eurozone’s over-indebted countries, but under the condition that they follow a structured default.
In an article in SZ’s Sunday edition, entitled “Insurance with a default guarantee”, the German mass daily said the Euro zone is vulnerable to crises, given that there is no common economic policy aligned with the common currency.
SZ said the “Schaeuble plan” is to render the euro as a completely independent currency, protected from political changes in individual member-states. As such, he is eyeing the creation of automated mechanisms, ones separated from any government in power.
The plan, according to the press report, foresees that when a Eurozone member-state is threatened with bankruptcy, it will receive a type of rescue loan package in order to cover its needs.
One primary condition, however, would be that the rescued country would have to reduce its debts to creditors.
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