International Monetary Fund lambasts inconclusive euro talks
BRUSSELS: The head of the IMF criticised the EU's piecemeal approach to rescuing the euro currency from contagion as ministerial talks in Brussels gave no succour to countries with worsening sovereign debt problems.
At a summit in October, France and Germany proposed setting up a permanent system to handle crises in the euro zone, admitting it would mean changing the EU Treaties.
Germany expressed a wish for investors to share losses in the event of debt restructuring.
Opponents fear this will cause further economic strife accross the euro zone as investors shun Irish, Portuguese and Spanish bonds, pushing their yields to record highs.
Ministers are currently discussing whether bondholder "haircuts" should form part of a permanent loan facility.
Many analysts believe Portugal will follow Ireland in seeking financial assistance from the European rescue fund, and there are fears that Spain might be forced to follow suit.
Separately, European Central Bank Governing Council member Axel Weber said he believed eurozone states could come up with more money if the existing 750-billion-euro EU-IMF safety net ever were to prove insufficient.
IMF Managing Director Dominique Strauss-Kahn failed to persuade finance ministers from the 16-nation single currency area on Monday to increase the size of their 750bn financial safety net or the European Central Bank to step up government bond purchases. "The euro zone has to provide a comprehensive solution to this problem. The piecemeal approach is not a good one," StraussKahn said.
Yesterday's ministerial talks on buffeting the euro zone against a worsening sovereign debt crisis will spill into tomorrow and next week, as countries prepare a summit to rescue the euro.
Today diplomats from the 27-member states are meeting to take stock of yesterday's talks to rescue the euro and pave the way for discussions next week on a permanent EU loan facility to be up and running by 2013. In the wake of more possible EU bailouts in Portugal and Spain, EU leaders will be meeting in Brussels again on 16 and 17 December to lay down plans for an EU loan facility to set in stone bailouts such as the ones that were granted to Greece and Ireland. Yesterday's meeting also saw a revival of discussions on eurobonds after the head of the Eurogroup, JeanClaude Juncker, and Italian Finance Minister Giulio Tremonti called on leaders to introduce common bonds to shield the troubled currency from speculators. German Finance Minister Wolfgang Schäuble labelled talk of eurobonds " off-target and unnecessary". Though Schäuble did not shun outright the idea of EU countries going to the market together, he insisted that differing interest rates on government borrowing were a way of imposing fiscal discipline. -PB News
ISLAMABAD: President AJK Raja Zulqarnain Haider called on Federal Minister for Kashmir Affairs, Gilgit-Baltistan Mian Manzoor Ahmad Wattoo at his residence. -Online