Senior Research Fellow and Director of the EU Centre in Singapore, Dr. Yeo Lay Hwee, and Dr. Reuben Wong, Council Member for the SIIA, both commented on the proposed European Monetary Fund (EMF), first mooted as a rescue fund to help EU member countries deal with future financial shocks.
Yeo Lay Hwee, director of the EU Centre in Singapore and senior research fellow at the Singapore Institute of International Affairs, told BT: 'This move to create an EMF makes one wonder about the role of the IMF and if it is still relevant in global financial governance. Clearly, the IMF reforms need to be taken more seriously.' Dr Yeo, however, cautioned against speculation surrounding the EMF as it is still only an idea and no details are yet available as to its form and function. As Ms Merkel herself has indicated, the creation of an EMF may require treaty changes, which may be more difficult than imagined. However, the EU's Lisbon treaty, which came into force on Dec 1, does not allow for bailing out eurozone countries, but it does permit aid to EU members outside the currency area. 'I think the idea (of a European Monetary Fund) is a good one. Without changing the treaty, it cannot be done. . . If the European Union is to be capable of taking action, it will run into such questions. The EU treaty will not be the end of history,' she said.
Reuben Wong, assistant professor of political science at the National University of Singapore, told BT that the euro bloc will not allow Greece to fail. 'Should Greece fail, the political fallout will be too damaging for the euro area. President Sarkozy has already announced that France must support the rescue of Greece, which is a major European country and an economy that cannot be ignored,' Dr Wong said.