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Euro zone budget could be conditional on discipline - IMF's Lagarde

Reuters  |  AIX-EN-PROVENCE, France 

AIX-EN-PROVENCE, (Reuters) - IMF said on Saturday that a proposed joint euro zone budget could be designed with conditions so that it does not become a no-strings-attached transfer of rich countries' cash to poorer members.

The leaders of and agreed last month on a proposal for such a budget that would be used to smooth out economic difference between euro zone countries and stabilise their economies when facing shocks.

The idea, at the heart of French Emmanuel Macron's plans for deeper euro zone integration, quickly ran into opposition from a dozen other EU countries, led by the Netherlands, concerned about how the money would be raised and used.

"This centralised budget capacity does not need to become a payment facility," said.

"It can very well have disciplinary conditions attached," said, speaking at an economic conference in the southern French city of

Though details remain to be hammered out, the proposal does not speak of imposing conditions, like fiscal discipline or carrying out reforms, to benefit from the joint budget.

Their proposal does, however, call for conditions to continue to be required for access to the euro zone's bailout fund, the

and have proposed that the joint budget be functional from 2021 and that it should be financed by a financial transaction tax, which other countries have already poured cold water on.

(Reporting by Leigh Thomas; Editing by and Stephen Powell)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Sat, July 07 2018. 23:22 IST