IMF's Lagarde to meet Sarkozy on Eurozone debt
Talks got underway in Paris on Saturday between International Monetary Fund managing director Christine Lagarde and French President Nicolas Sarkozy. The leaders planned to discuss the European debt crisis before Lagarde heads to Berlin on Sunday to meet with German Chancellor Angela Merkel for more talks on how to recapitalise banks.
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On Friday, the European Commission gave member states 10 days to agree to a plan to shore up their lenders. The IMF believes that between 100 and 200 billion euros are needed to cover potential losses.
A default in a weaker economy could trigger a financial crisis across the continent. French banks are seen as especially overexposed to Greek, Italian and Spanish debts.
On Saturday, French, German and Italian employers’ federations called for greater European integration.
France’s Medef, Germany’s BDI and Italy’s Cofindustria want a new treaty to be drawn up in order to tackle the Eurozone’s shortcomings.
Merkel insisted on Friday that banks must first turn to investors for funds before appealing for national or European money.
France is reportedly willing to turn to public funds to rescue at-risk lenders. A state investment fund has already made plans to save Franco-Belgian bank Dexia.
The European Commission plans to offer a framework for EU nations to coordinate on recapitalising banks in the coming days.
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