El País: Brussels Pushes for European Version of IMF

The European Union is proposing its own version of a bailout fund modeled after the International Monetary Fund. “With initial firepower of €500 billion, which could be boosted up to a further 20%, the new European Monetary Fund will bail out member states in exchange for reforms, as the European Stability Mechanism (ESM) has done in the past with Greece, Ireland and Portugal,” reports El País. Germany rejected a stronger plan. “All the most relevant decisions, such as raising capital or bailing out a member, will require a unanimous vote.” The plan is that such a fund could help as the euro – still a young currency – continues to encounter challenges since the 2008 debt crisis. Bailout amounts would require 85 percent of approval which means automatic veto rights for Germany, France and Italy. A new high-level minister post will oversee coordination of economic policies. – YaleGlobal