Wednesday, 30 November 2011

German thaw?

Following the initiative of central banks led by the USA Federal Reserve to save the Eurozone, news that there is a thaw in the German position.

The Daily Telegraph is reporting thus:

'Germany is apparently willing to boost the cash available to the IMF via "bilateral loans", after having said at the G20 summit in Cannes in November that it was against such a move. Finance Minister Wolfgang Schaeuble said this evening:

QuoteWe are prepared to increase the resources of the IMF through bilateral loans. If the IMF wants to widen its freedom to take action by increasing the special drawing rights, then we are prepared to talk about it. But, to be clear, this is about IMF instruments. Naturally, the details would have to be discussed. Bilateral loans are possible in principle.

This could mean that the 17 eurozone nations lend money directly to the IMF, which then passes it on to struggling states. This gets around the problem with the ECB, which is barred from doing exactly that. '

It is all convoluted.  The sooner the ECB has direct powers the better.

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