Germany may not be ready to back an increase in Europe's bailout fund at a summit next week, delaying efforts to meet international demands for Europe to strengthen its defenses against the region's sovereign debt crisis.
Managing Director of the International Monetary Fund (IMF) Christine Lagarde welcomed today an increase on the financial rescue capacity of Eurozone to prevent a new flare-up of Europe's sovereign debt crisis.
IMF chief Christine Lagarde urged today European governments to increase their financial firewall to prevent Greece's troubles from ensnaring bigger countries like Italy and Spain.
Greece's public sector creditors may need to participate in a restructuring of its debt if a haircut negotiated with private sector bondholders is not enough to make Athens' debt sustainable, IMF Managing Director Christine Lagarde said.
European leaders agreed on a permanent rescue fund for the euro zone and 25 of the 27 EU states backed a German-inspired pact for stricter budget discipline, but they struggled to reconcile fiscal austerity with economic growth.