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IMF chief calls for centralised fiscal control of euro zone
Date 15/09/2010 13:58  Author webmaster  Hits 958  Language Global

15 SEP 2010

By Dan O'Brien | Irish Times

THE HEAD of the International Monetary Fund (IMF), Dominique Strauss-Kahn, has called for the creation of a fiscal federation in the euro zone which would have much greater control over tax and spending issues in member states.

Speaking at a conference in Brussels, Mr Strauss-Kahn, a leading figure in France’s opposition Socialist Party, said “a more integrated and centralised fiscal framework could deliver higher and more stable growth for Europe” . He warned that without “fiscal federalism”, Europe’s single currency may not survive.

Mr Strauss-Kahn said the euro zone had ceilings on budget deficit and public debt, and a “speed camera system” in the European Commission. Although there is no court to try offenders in, he accepted that the large bailout fund, put in place in May by Europe and the IMF to respond to the Greek budgetary crisis, was a temporary form of emergency assistance.

He proposed greater powers for the European Commission to police national economic policies or a separate, independent European institution, along the lines of the European Central Bank (ECB).

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