IMF says euro needs master plan, not deadline

Reuters: Euro zone leaders need a master plan and “collective determination” to rescue the common currency, but not necessarily a deadline, International Monetary Fund Managing Director Christine Lagarde said on Tuesday.

US billionaire George Soros said on Saturday that the euro zone had three months to solve the debt crisis.

“I’m not a great fan of those target headlines that keep being missed anyway,” Lagarde told Reuters in an interview on the sidelines of a conference in the Latvian capital.

While euro zone leaders should make decisions sooner rather than later, they need to agree on a comprehensive set of principles to enforce over time, she said.

“The master plan that everybody signs up to will be important because it will set a vision, it will set a collective determination. And that is lacking at the moment,” she said.

With Greece, Ireland and Portugal all under international bailout programs, financial markets have grown increasingly anxious about the risk that Spain, mired in a deepening banking crisis, could be forced to do likewise.

Sources say Spain’s Prime Minister Mariano Rajoy is pressing for a direct European rescue for the lenders with moral support from the European Commission, but Germany is reluctant. Media reports say Berlin is instead pressing Madrid to request a full bailout.

Lagarde said decisions need to be made about Spain’s banking sector, but denied the country had sought the IMF’s aid for recapitalisation. She refused to comment on how the IMF would react to such a request.

“In the short term, there are clearly decisions that need to be made in relation, for instance, to the Spanish banking system. This is clearly in the making at the moment,” she said.

“It will be for them to decide how they want to address the issue,” she said. “It’s not for me to opine on that. I’ve not been asked myself that, I’ve not received any solicitation to the effect of having a program.”

She commended Spain’s government on its pension and labour reforms, saying Spain did not need additional measures in terms of fiscal reforms.