IMF Involvement In Eurozone Rescue Is Highly Desirable, Says ECB's Praet
The involvement of the International Monetary Fund in future rescue package for the euro area member countries is highly desirable, European Central Bank Executive Board Member Peter Praet said Wednesday.
"The involvement of the IMF in the financing schemes is not strictly required but is still highly desirable, also in view of the Fund's analytical expertise in crisis resolution," he said at an event in Beijing.
Any troubled member nations of Eurozone can directly approach the permanent rescue fund called the European Stability Mechanism. The interventions are conditional on member states first signing a Memorandum of Understanding containing reforms or fiscal consolidation to be implemented in order to restore the financial stability.
According to Praet, the greatest challenge is to keep up the reform momentum even if the severe manifestations of the crisis abate and financial market conditions come back to more normal conditions.
"The monetary policy response to the crisis has been mainly aimed to buy time for reforms that become effective with some time lag, but it cannot substitute for reforms as time goes by," he noted.
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