LUXEMBOURG (MNI) – Finalizing the E440 billion Eurozone “special
purpose vehicle,” which is part of an EU/IMF backstop fund of E750
billion, is a good step forward and important for the stability of the
system, International Monetary Fund Managing Director Dominique
Strauss-Kahn said on Monday.
Speaking to reporters after attending a meeting of Eurozone finance
ministers in Luxembourg, Strauss-Kahn said the finalization of the
special purpose vehicle – expected later Monday – would be a “good step
forward” and “very important for the stability of the system.”
He said the markets would come to understand that the backstop
system put in place by the Eurozone finance ministers and the
International Monetary Fund was a “really strong one.”
Increasing pressure on the Euro and sovereign bond spreads of some
Eurozone members prompted a E110 billion bailout of Greece and the
establishment of a E750 billion backstop fund that other countries could
use in emergency cases.
Finance ministers are expected to finalize the E440 billion special
purpose vehicle fund later Monday.
The central concern is whether the E440 billion will be jointly
guaranteed by participating countries or whether each country will take
responsibility for its own share.
–Luxembourg: 0032 487 (0) 32 803 665, echarlton@marketnews.com
[TOPICS: MT$$$$,M$$FX$,M$$EC$,M$X$$$,M$$CR$]