IMF alert over stress on euro
THE head of the International Monetary Fund warned the euro is under "acute stress" and piled pressure on Germany by advocating a series of measures to pull Europe out of its crisis that Chancellor Angela Merkel has strenuously opposed.
Christine Lagarde urged leaders of the 17 countries that use the euro to consider jointly issuing debt, aiding troubled banks directly and perhaps relaxing strict austerity conditions on countries that have received aid -- all measures that Ms Merkel, the leader of the eurozone's largest and most powerful economy, has resisted.
But Ms Lagarde, speaking after a meeting in Luxembourg of the finance ministers of the 17 countries that use the euro, said the IMF had found the situation in Europe to be dire.
"We are clearly seeing additional tension and acute stress applying to both banks and sovereigns in the euro area," she said.
Asked what Germany would think of her suggestions, she smiled and said: "We hope wisdom will prevail."
Ms Lagarde issued her warning in the lead-up to a week that promises to be unusually active in the fight to save Europe's common currency. Today, Ms Merkel will travel to Rome to meet Italian Premier Mario Monti and the leaders of France and Spain in Rome in an effort to forge a common strategy to save the currency that some, Ms Merkel included, consider essential to preserving the European Union itself.