Washington: International Monetary Fund chief Christine Lagarde welcomed the expansion of the eurozone's firewall on Friday, saying it opens the door to the IMF boosting its own resources for financial emergencies. Lagarde called the deal reached Friday in Copenhagen to establish a fund to beat back financial contagion of roughly 800 billion euros, more than a trillion dollars, as a critical step toward ending the eurozone financial crisis.
"The IMF has long emphasised that enhanced European and global firewalls, together with the implementation of strong policy frameworks, are critical for ending the crisis and
securing international financial stability," she said in a statement.
The deal by eurozone finance ministers to combine and expand the resources of the new European Stability Mechanism and the expiring European Financial Stability Facility "will strengthen the European firewall and support the IMF's efforts to increase its available resources for the benefit of all our members."
The IMF has maintained for months that the eurozone needed a backstop to shore up economies hit by sudden financial market shifts of at least USD 1 trillion.
IMF members held that up as a precondition to meeting the Fund's goal of boosting its own financial intervention resources by USD 500 billion.
First Published: Friday, March 30, 2012, 22:36