German bid to bankrupt eurozone partners falls flat

21st May 2010, Comments 0 comments

A German bid to declare troubled eurozone countries bankrupt as a condition for creating a future, permanent safety net drew no immediate support on Friday, EU president Herman Van Rompuy said.

"A procedure for orderly insolvencies will have to be an integral part of any fixed crisis-resolution framework for the euro area," the German finance ministry said in its submission to a task force set up to reform 'economic governance' across the European Union.

However, Van Rompuy, who presided over the first meeting of the task force in Brussels Friday, said the idea remained a long way off in the future.

"It is only in a long-term context" that the EU would put into place a permanent crisis resolution framework that might include a procedure for orderly state insolvencies, he said.

"In the short-term, nobody proposed that kind of scheme," stressed Van Rompuy.

French Finance Minister Christine Lagarde also said that the controversial German plan "does not figure" among ideas being taken forward.

© 2010 AFP

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