Italy has held preliminary talks with the International Monetary Fund (IMF) about financial support to help them deal with the euro zone’s debt crisis. There’s even been talk of it being co-funded by national European central banks, but as of right now no decision has been made according to several sources close to the discussions.
Mario Monti, the new Italian Prime Minister, briefed EU finance ministers on Italy’s fiscal plans during the EU minister meeting yesterday. No formal request has been made for IMF assistance yet but sources say this may happen after he presents his budget to Italy’s cabinet on December 5.
Sources close to the situation say that talks between Italy and the IMF have been going on for weeks, but quickened last week after Germany said the European Central Bank (ECB) could not directly assist Italy. “Discussions are currently around a 400 billion euro ($530.6 billion) contingency package. Italy has not filed a request but things are building in that direction,” the source said.
Other banks may have to help out since the IMF only has $380 billion available to lend to all countires. The IMF has denied talks are going on and their statement reads, “The IMF wishes to reaffirm that there are no discussions with the Italian nor Spanish authorities on any form of IMF financing.”
These talks come as many economists believe the Euro Zone is entering into a crucial 10 day period to save itself.
“We are now entering the critical period of 10 days to complete and conclude the crisis response of the European Union,” said Economic and Monetary Affairs Commissioner Olli Rehn as EU ministers met yesterday.
Stocks are poised to open higher today with futures for the major indexes up more than 2%.