By: Mike Cambell
The International Monetary Fund is based in Washington DC and has a membership of 186 countries. The idea behind the IMF is that it should help to secure financial security; promote monetary co-operation around the world; facilitate international trade; bolster employment reduce poverty and promote sustainable economic growth around the world. In the even of an economic calamity, members can call on the IMF for loans, based on the subscriptions that they pay into the fund.
Greece is an IMF member state and it has been suggested that it may call on the fund for help in its current debt and deficit crisis. Indeed, the IMF has said that it would do all it could to help, should the call come. However, the prospect of a Eurozone member going cap in hand to the IMF is not a thought that many EU nations would enjoy.
The Greek situation (and similar problems that may arise in Spain, Portugal and Italy) has led some to seriously consider establishing a European version of the IMF. The principal aim of such an organisation would be to ensure the stability of the Eurozone and to ensure that the block would avoid another debt crisis in the future. The move is supported by France and Germany. German Chancellor, Angela Merkel was supportive of the idea, suggesting that the instruments available to EU leaders to deal with a future crisis needed to be bolstered. It is likely that details of a new European Monetary Fund and how it would derive its finances may be in place as early as June. Although it might have all the hallmarks of shutting the stable door after the horse has bolted, the eastward extension of the EU may mean that this is an idea whose time has come.