Italy hasn't asked for IMF aid: Lagarde

November 29, 2011 | 10:01

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International Monetary Fund chief Christine Lagarde said Monday that Italy has not asked for any aid from the Fund, but meanwhile called for EU leaders to quickly put forth a "comprehensive solution" to the eurozone crisis.

Denying a news report that Rome was negotiating a 600 billion euro ($800 billion) IMF rescue package, Lagarde said there had not been any official request for money from Italian authorities.

"The IMF does not invest, the IMF lends. And it lends when it is requested by a country that needs assistance," she said on the first stop of a South American tour.

"At this point in time, we have not received any request from Italy, nor are we negotiating with either Italy or Spain."

The denial followed a report by the Italian newspaper La Stampa alleging that the fund could bail out Italy with up to 600 billion euros ($800 billion) in aid.

According to the report, the money would give Prime Minister Mario Monti a window of 12 to 18 months to implement urgent budget cuts and growth-boosting reforms "by removing the necessity of having to refinance the debt."

Lagarde meanwhile urged European leaders to take action to stop the contagion that has begun to impact even the eurozone's strongest and largest economies, Germany and France.

"As far as the European solution is concerned, clearly we see the need for a comprehensive, rapid set of proposals that would form a comprehensive solution. And the IMF can be a party to that," she said.

Yields on Italian bonds shot up as high as 8.0 per cent last week as lenders increasingly shunned the country's debt amid worries that the entire eurozone was teetering.

AFP

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