Monday, November 29, 1999

EU crisis mechanism must be made unattractive - Rehn

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The European Union's 750 billion euro crisis mechanism must be made so unattractive that no country will resort to it, EU Economic and Monetary Affairs Commissioner Olli Rehn said on Saturday."It is essential that we prepare ourselves for the worst case scenario. But of course there is the issue of moral hazard," Rehn told the annual meeting of the European Bank for Reconstruction and Development."This mechanism must be made so unattractive that no EU leader will resort to it."Rehn said European Union states with some space in their fiscal accounts should not accelerate in consolidating their public sector deficits to help avoid pushing the 27 member bloc into contraction.He said Europe needed an exit strategy from anti-crisis measures that took into account the differing circumstances of member states and added exit strategies would be the core agenda item for the meeting of G20 rich nations in June.(Reporting by Michael Winfrey)
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