Lagarde: ESM reform isn't against any Member State

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, cited by ANSA. The reform has caused a big political furore in Italy, amid fears it could put the country under renewed pressure on the financial markets.

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".

During Lagarde’s first meeting as president on Thursday ECB chose to hold interest rates steady, leaving its monetary policy unchanged, as it was widely expected.

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