Luxembourg, 20/06/2013 (Agence Europe) - The head of the Eurogroup, Jeroen Dijsselbloem, admitted in Luxembourg on Thursday 20 June that there was a “debate” going on about the institutional setup for the financing and monitoring on the ground of any new aid plans for eurozone nations in the future.
Asked about the future role of the International Monetary Fund as a donor and member, along with the European Commission and the European Central Bank, of the troika that monitors progress in introducing the reforms attached to international aid packages, Dijsselbloem said he could see the possibility of changes being made in the future, but first of all, one had to get out of the current crisis.
Agreeing with Dijsselbloem, the managing director of the European Stability Mechanism (ESM), Klaus Regling, said that the eurozone's permanent bailout fund (ESM) could not replace the IMF in any future aid programmes, explaining that there was a division of labour in Europe. He does not approve of the idea of the ESM becoming the single bank restructuring authority to be set up as part of banking union.
ESM. The ESM came on stream in October 2012 and to date has disbursed €43 billion in aid (€40 billion for Spanish banks and €2 billion for Cyprus), with 90% of its total lending power of €500 billion remaining intact. The member states have so far contributed €48 billion of the fund's initial capital. In total, the ESM and its predecessor the ESF have committed €240 billion and paid out €200 billion in aid to Greece, Ireland, Portugal, Spain and Cyprus. Filling a gap in the institutional architecture of EMU, the two bailout funds are playing a full role in financial stability and are fully accepted by the markets, explained Regling. (MB/transl.fl)