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IMF urges ECB to play bigger crisis-fighting role

26 September 2011 08:02 (UTC +04:00)

BakÄ± - APA-Economics. Europe came under fresh pressure on Sunday to ramp up its response to the euro zone debt crisis with the IMF saying the European Central Bank is the only player big enough to "scare" financial markets.

Germany and many top officials within the ECB itself are wary about the central bank being drawn more deeply into supporting Greece and other debt-stricken states. But after world stock markets plunged on fears the crisis could spread to other nations and deliver a big blow to the global economy, European policymakers faced enormous pressure to come up with a bolder rescue plan.

"The ECB is the only agent that can really scare the markets," said Antonio Borges, the head of the IMF’s European department at a gathering of top economic policymakers from around the world. IMF chief Christine Lagarde was due to meet the finance minister of Greece -- where the crisis is now centered -- on Sunday afternoon, as officials wrestled with how to bolster Europe’s banking system and keep the crisis contained. The European Union and IMF have already bailed out Greece, Portugal and Ireland, and officials want to stop the crisis from spreading to Italy, Spain and possibly beyond. Borges said it was essential to combine the ECB’s potential crisis-fighting power with Europe’s 440 billion euro ($594 billion) bailout fund to deliver the necessary force to quell the crisis.

However, a number of ECB officials have voiced reluctance.

"It is not helpful that we have an avalanche of new proposals every week," ECB Governing Council member Ewald Nowotny said.