Wolfgang Schäuble, Germany’s finance minister, is winning support for his European Monetary Fund idea. Going further than in an article he wrote for the Financial Times, Lorenzo Bini Smaghi, an executive board member at the European Central Bank, has told the Netherlands’ NRC Handelsblad, that Mr Schäuble’s proposal “seems very reasonable” and “deserves to be explored further”.  His comments contrast with the much more sceptical tone taken by Jürgen Stark, his executive board colleague, and Axel Weber, Germany’s Bundesbank president.

Except the ECB has clearly taken a disliking to the proposed title. The words “monetary fund” obviously suggest the institution’s primary objective would simply be to dish out billions of euros to countries in trouble (Greece) – something to which the Frankfurt-based institution would object strongly. Mr Bini Smaghi sees its role of differently. “Not only must the management of the euro be enhanced, and given more powerful means for preventive action and sanctions, but we also need a financial mechanism. So that we are ready when the euro is attacked,” he said in the interview. Read more