The reform of European
Stability Mechanism (ESM), the eurozone's bailout fund, "does
not intend to damage any member State", European Central Bank
(ECB) President Christine Lagarde said on Thursday.
The reform has caused a big political furore in Italy, amid
fears it could put the country under renewed pressure on the
financial markets, and Premier Giuseppe Conte said Thursday that
his government is seeking to "improve" it.
Lagarde said that if the ESM had existed at the start of the
Greek crisis, "we would have resolved it more quickly.
"We can't rewrite history, but having rules, collective
action clauses (CACs) to prevent toxic creditor behaviour,
benefits any country that is in difficulty".
Lagarde also welcomed the idea of Italy setting a limit on
the amount of State bonds held by banks.
She said the opening up of some Italian policy makers to this
notion was "a big step forward and any step forward in this area
is good news".
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