IMF-type European Monetary Fund to be set up, possibly in June

Berlin - In order to help present and future fiscal crises for the 16-nation currency bloc, Europe has decided to initiate an IMF-type of monetary union called the European Monetary Fund.

The recent debt crisis in Greece, and possible fiscal crises in Portugal, Italy and Spain, has prompted leaders of the European Union to act swiftly in order to prevent present and future fiscal crises. According to Business Week, European governments are supporting a monetary fund similar to the IMF titled the European Monetary Fund, which would rush to the aid of fellow European nations. The European Monetary Fund would try to reduce systemic risk and instability of the 16-nation bloc and possibly bailout member states who are facing default of their debt. The Globe and Mail notes that the European version of the IMF would bring more economic union in the region and has gained considerable support by the European Commission and German leaders. “The commission is ready to propose such a European instrument for assistance, which would require the support of all euro area member states,” said Amadeu Altafaj Tardio, a spokesperson for the European Commission, during a scheduled business news conference. Even though proponents of the EMF are proposing a June date, Reuters reports that it could take months or years to set up such a fund because of the possible political blocks that could occur such as a change to the Lisbon Treaty and funding within the Euro zone. At the present time, the IMF has not commented on the EMF proposal. Nevertheless, the EMF would not help Greece because they are months behind and Greece has consistently stated that it will seek immediate assistance from the IMF.