European Central Bank chief Mario Draghi warned yesterday the EU needs to implement measures to tighten budget discipline quickly to resolve the debt crisis, as a successful Spanish bond sale sent shares and the euro higher.
Russia meanwhile signalled it was ready to contribute up to $20 billion to an EU-led effort to boost the funds available to the International Monetary Fund for rescue programmes which would benefit weaker eurozone states.
Mr Draghi called on EU governments to quickly follow through on their pledge at a summit last week to agree to drastically tougher budget rules.
“The decisions of the European Council summit, together with the (measures) approved recently by the European Parliament, are a breakthrough for clear fiscal rules in our monetary union,” Mr Draghi told a congress in the German capital.
“However, the crisis has not ended yet. It is now important not to lose momentum and to swiftly implement all those decisions that have been taken to put the euro area economy back on course,” he said.
After non-euro Britain blocked changing an EU-wide treaty, the other 26 EU states signalled their willingness to join a “new fis-cal compact” imposing stricter budget rules.
The pact should be finalised at an EU summit to be held “end January-early February”, EU president Herman Van Rompuy said yesterday.
However IMF managing director Christine Lagarde warned the eurozone crisis is still escalating and threatens every economy in the world. “The issues that we have in front of us now are not just a concern for the eurozone, not just a concern for the EU, not just a concern for the advanced economies,” she told a forum on women in politics at the US State Department.
“There is no economy in the world, whether low-income countries, emerging markets, middle-income countries or super-advanced economies, that will be immune to the crisis that we see not only unfolding but escalating.”
With Europe’s leaders still struggling after months to come up with a comprehensive fix to end the crisis, Ms Lagarde said the resolution will involve efforts from all countries and regions.
EU plans to boost funds available to the IMF for eurozone rescues got a boost when President Dmitry Medvedev said Russia is “ready to invest.” Mr Medvedev did not name a figure himself but a top aide said earlier Russia could contribute up to $20 billion (€15 billion) depending on progress by EU nations towards their goal of providing a 200-billion-euro boost to the IMF.