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FRANKFURT: The European Central Bank will consider a proposed emergency fund for eurozone economies in distress, ECB chief Jean-Claude Trichet said on Wednesday.
"We don't reject the idea at this stage. We have to look at it and look at the details," Trichet told reporters on the sidelines of an exhibition opening in Frankfurt, where the ECB is headquartered.
Trichet said the plan as he understood it was for "non-concessional financial support with strong conditionality", meaning the fund, which has been dubbed a European Monetary Fund, would only provide loans, not grants, and impose strict conditions.
"At the present moment, the governing council of the ECB has no opinion," he said.
Trichet nonetheless added that "the title which is given - EMF - doesn't seem to me necessarily appropriate. I would say it is not monetary but more financial support."
Germany backed the idea of a European version of the Washington-based International Monetary Fund (IMF) over the weekend.
The ECB's chief economist Juergen Stark has warned, however, that the scheme "could be very expensive, create the wrong incentives and finally, burden countries (that have) more solid public finances".
German central bank chief Axel Weber, an influential member of the ECB governing council, added on Monday that "new institutions won't help if the existing ones are ignored."
Weber said "any other discussion is a sideshow which will distract from the necessary (fiscal) consolidation".
Greece's fiscal crisis has ratcheted up tensions in the 16-nation eurozone and sparked a debate on whether weaker economies should receive financial support from their neighbours and, if so, what type of aid they should get.
Germany, the eurozone's biggest member, along with the ECB and the European Union, have pressed Athens to get its finances in order before asking for financial support.
Greece has approved controversial austerity measures but has not ruled out going to the IMF for help, something eurozone leaders are keen to avoid.
- AFP/sc
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