IMF preparing 600 billion euro loan for Italy: reports
Mario Monti, probable replacement for Silvio Berlusconi as Italian Prime Minister, arrives for Friday’s vote in the italian Senate on an austerity package.
The IMF is preparing a 600 billion euros ($794 billion) loan for Italy, an Italian newspaper reported on Sunday.
The money will give Italian Prime Minister Mario Monti a window of 12-18 months to implement urgent budget cuts and growth-boosting reforms, La Stampa reported. Monti has been under pressure to speed up anti-crisis measures, Bloomberg reported.
Silvio Berlusconi, Monti's predecessor said that he had turned down an offer from the IMF. Christine Lagarde, the IMF chief, later denied the claim.
According to AFP:
"IMF intervention is inevitable but not enough," Paolo Guerrieri, economist at the College of Europe in Bruges, was quoted by La Stampa as saying.
"There is a grave risk of a liquidity crisis soon in the entire eurozone, including both sovereign states and banks," Guerrieri said.
"Italy and Spain need the necessary time to carry out reforms," he added.
Italy would pay an interest rate of 4 percent to 5 percent on the loan.
There is no paywall on the story you just read because a community of dedicated listeners and readers have contributed to keep the global news you rely on free and accessible for all. Will you join the 319 donors who have supported The World so far? From now until Dec. 31, your gift will help us unlock a $67,000 match. Donate today to double your impact!