IMF chief calls for closer economic cooperation in the eurozone

12 May 2010

Dominique Strauss-Kahn, the managing director of the International Monetary Fund (IMF), has called on members of the eurozone to cooperate more closely on economic governance.

In a call that is likely to be met with resistance in countries such as Germany - which is contributing the largest amount to the ongoing bailout of Greece - Mr Strauss-Kahn said short-term fiscal transfers between member states should be introduced.

The IMF head told the Financial Times: "What you need is stronger surveillance and tools to organize transfers from one part of the area to other parts."

He stressed that such measures should not be employed on a long-term basis and he was not proposing that the likes of Germany would permanently prop up weaker economies such as those in Portugal and Greece.

Last month, Mr Strauss-Kahn warned that if the economic difficulties of Greece were not successfully tackled, its financial problems may spread to other countries in the European Union.

By Asim Shah

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