Chair of ECON Sharon Bowles comments on proposed European Monetary Fund

1.00.00pm GMT Mon 8th Mar 2010

Sharon Bowles MEP being interviewed at the European Parliament

Lib Dem MEP Sharon Bowles, who chairs the European Parliament's powerful Economic and Monetary Affairs Committee (ECON), has commented today on German and French plans to establish a European Monetary Fund.

A European Monetary fund is being mooted in the wake of the financial crisis in Greece, which has a public deficit of 12.7% - more than four times Eurozone rules.

While Greek Prime Minister, George Papandreou, has said that Greece will not be looking for a bail out from the EU, controversy rages as to whether or not he will seek a loan from the International Monetary Fund.

Sharon Bowles said:

"In Japan in the mid-1990s there was a similar proposal to establish an Asian Monetary Fund which did not take off. However, countries in Asia did establish a loose pooling of reserves, called the Chiang Mai Initiative.

"As I understand it, a European Monetary Fund has been proposed to lend to countries within the Eurozone, such as Greece, and not countries outside of it, such as the UK.

"In any case, a European Monetary Fund must be accompanied by strong technical management as is the case with the International Monetary Fund. It could also form a useful tool to encourage better discipline within the Eurozone.

"However, it will be no good if the European Monetary Fund is an overly-lite version of the International Monetary Fund."

Sharon will be chairing public hearings on discrepancies in the Greek public accounts over the next weeks.

ENDS