Europe must take decisive action to overhaul rules governing the Euro zone, the International Monetary Fund said in withering criticism of the continent's economic management, according to media reports.
The IMF called for Brussels to be given more say over national budgets, calling on the eurozone to adopt fundamental reforms and complete the project of monetary union. The euro area fiscal framework needs to be substantially strengthened the Washington-based fund said, in order to create a well-functioning monetary union.
The prospect of rewriting the EU's rulebook will spook many officials in Brussels and national capitals who only recently completed an overhaul of EU rules that took years to complete and faced substantial opposition.
The IMF warned current rules underpinning the euro, known as the Stability and Growth Pact, did not encourage member states to take advantage of good times to build sufficient buffers and to bring down debt to prudent levels.
The pact has been frequently flouted, despite the possibility of heavy fines against those nations which have not abided to it.
But as the 16-member eurozone has been convulsed by a debt crisis that began in Greece and has since rippled across the continent, fears over the euro's survival have fueled calls for reform.
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