IMF urges Germany to help ailing banks directly

25 June 2012

Germany should use its position as Europe's leading economic power to provide direct assistance to struggling banks in the eurozone, Christine Lagarde believes.

The managing director of the International Monetary Fund (IMF) has added her voice to calls for Angela Merkel and her fellow policymakers in Berlin to take a more proactive stance towards tackling the region's ongoing debt crisis.

During a speech delivered to finance ministers from across the eurozone at a conference in Luxembourg, Ms Lagarde said a collective approach is required from officials in order to combat issues such as Spain's banking problems.

The IMF chief noted that financiers and sovereigns in the area are experiencing "additional tension and acute stress", meaning moves towards a full monetary union should be made sooner rather than later.

Then, when asked how Germany is likely to react to her proposals, Ms Lagarde smiled and said: "We hope wisdom will prevail."

By Claire Archer

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