MW: IMF: 'Decisive action' needed for euro debt crisis
By Barbara Kollmeyer
MADRID (MarketWatch) -- The International Monetary Fund warned Monday that the sovereign debt crisis in the periphery euro zone threatens to overwhelm a favorable outlook for the broader region. The IMF said policymakers are "facing uncomfortable dilemmas," with uncertainty about how the current crisis will end. "With deeply intertwined fiscal and financial problems, failure to undertake decisive action could rapidly spread the tensions to the core of the euro area and result in large global spillovers," the IMF said. In a statement it said getting all members to "scale up" the European Financial Stability Facility and a further extention of its potential uses, such as to secondary markets and term funding guarantees "would send a much-needed signal that member countries "will do whatever it takes to safeguard the stability of the euro area." It also urged an end to the debate about "debt re-profiling or restructuring," and avoid any impression that under the European Stability Mechanism, financial support will be conditional on debt restucturing.
