Eurozone plan could help ailing members

By John O'Donnell | March 21, 2009, Saturday |

Print Edition

EUROZONE countries have agreed to a rescue plan to prevent euro-using nations from going bankrupt, a senior German lawmaker said. The plan will probably be put into use with Ireland and Greece the top candidates for aid.

"There is a plan," said Otto Bernhardt, a member of Chancellor Angela Merkel's Christian Democrats who chairs the party's financial policy group in parliament. "The finance ministers have agreed the procedures. The core point is: We won't let anyone go bust," he told Reuters.

Of all the eurozone states, Bernhardt said Ireland was in the "worst situation of all," followed by Greece. He made clear that any aid would come at a price.

"We would look very closely at past sins," Bernhardt said. "We will not tolerate there being low-tax countries like Ireland, for example. We will insist on a minimum corporate taxation rate."

Countries such as Ireland and Greece have been hit hard by the economic downturn and are now being forced to pay hefty premiums over stronger bloc members to finance their debt, further aggravating their financial troubles.

Speculation has grown in recent weeks that stronger members of the eurozone, such as Germany, could step in to help ailing partners by giving aid.

On March 3, European Monetary Affairs Commissioner Joaquin Almunia said that the eurozone had a way of bailing out its members, if they faced a crisis, before they had to seek help from the International Monetary Fund.

Economy

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Eurozone plan could help ailing members

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