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Brussels blog by some wire service journalists

IMF head Christine Lagarde piles pressure on Germany’s Merkel by advocating joint debt

By DON MELVIN and TOBY STERLING

LUXEMBOURG (AP) — The head of the International Monetary Fund warned Thursday that the euro is under “acute stress” and piled pressure on Germany by advocating a series of measures to pull Europe out of its crisis that its Chancellor Angela Merkel has strenuously opposed.

Christine Lagarde urged leaders of the 17 countries that use the euro to consider jointly issuing debt, aiding troubled banks directly and perhaps relaxing strict austerity conditions on countries that have received aid — all measures that Merkel, the leader of the eurozone’s largest and most powerful economy, has resisted.

But Lagarde, speaking after a meeting in Luxembourg of the finance ministers of the 17 countries that use the euro, said the IMF had found the situation in Europe to be dire.

“We are clearly seeing additional tension and acute stress applying to both banks and sovereigns in the euro area,” she said late Thursday.

Asked what Germany would think of her suggestions, she smiled and said “We hope wisdom will prevail.”

READ THE FULL STORY HERE.

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Don Melvin

Slobodan Lekic

Raf Casert

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