Europe turns towards IMF fix for Greece

A director of the German central bank, the Bundesbank, said that maybe the best solution for Greece — if it cannot cope with its debt — would be to declare itself “insolvent.”

The European Central Bank has already said that an approach by Greece to the IMF would be inappropriate.

However outgoing Dutch finance minister Jan Kees de Jager said his administration was “a proponent of following the IMF route,” but added that the IMF alone “will not be enough” and that there would have to be a “parallel” European solution.

Finland, meanwhile, also believes that eurozone contributions should be “bilateral” and “voluntary.”

A British diplomat stressed on Friday that “in the first instance this is a eurozone issue.”

However, London stressed that IMF assistance — technical or financial — “can be beneficial.”

The Washington-based International Monetary Fund has never rescued a eurozone member but has been active in other European Union states in recent months, giving out loans to Hungary, Latvia and Romania.

An IMF rescue for Greece would be seen by some as a humiliation for the eurozone.

“It's not a question of prestige, it's a question of seeing what is the best way to respond to the situation,” European Commission chief Jose Manuel Barroso said in an interview with France 24 television.

In hawkish comments that have changed the political landscape since a tentative agreement by finance ministers for the eurozone to deal with the problem internally, German Chancellor Angela Merkel said persistent European fiscal rule-breakers should be expelled from the eurozone as a measure of last resort.

Under pressure from the EU, Athens has announced draconian action to fix its public finances — triggering strikes and violent protests on the streets of Athens.

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