Germany Merkel: European Monetary Fund Would Be 'A Good Idea' 8  MAR   BERLIN - German Chancellor Angela Merkel said Monday that she supports the idea of creating a European Monetary Fund, but she stressed that the EU Treaties would first have to be changed in order to allow financial aid for troubled Eurozone member states. BERLIN (MNI) - German Chancellor Angela Merkel said Monday that she supports the idea of creating a European Monetary Fund, but she stressed that the EU Treaties would first have to be changed in order to allow financial aid for troubled Eurozone member states. "I think the idea is good and interesting," Merkel told the foreign press in Berlin. One has to reflect "on ways in which the EU and the Eurozone can help legally" when a member state runs into financial problems, she said. "This means that the treaties have to be changed," she stressed. One has to discuss "how we have to change the Treaties so that the Eurozone can react better" to sovereign debt crises, she said. Merkel noted that there is already a special fund to support financially ailing EU member states that are not part of the Eurozone. "If we want to solve the problems [of the Eurozone] without the IMF we need selected instruments" also for the Eurozone, she argued. Merkel added that even opposition from the European Central Bank to the idea of a European Monetary Fund would not stop her "discussing the idea further." Asked if Germany would agree to financially support Greece, Merkel replied that this was not an issue at the moment. "There does not exist a situation where an immediate default is in the offing," she stressed. "The [EU] Treaty contains a no bail-out clause and limits our scope of action," she reminded. "I do not rule out anything but I do not affirm anything either." Once confidence rises, Greek bond spreads will come down again, Merkel predicted. The Chancellor reaffirmed that speculation against the euro had to be curbed. The current problems of Greece were partly due to such speculation, she opined. While one cannot fully ban credit default swaps, "one needs more transparency and possible restrictions" on CDS markets, she said. However, such a tightening of regulations must be undertaken on the both the European and the international levels, she argued. Merkel also called for closer economic policy cooperation in the EU. Member states should formulate common targets, but tax and welfare policies should remain at the national level, she said. --Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com [TOPICS: M$G$$$,MT$$$$,M$X$$$,MGX$$$,M$$CR$] 3/8/2010 11:41:00 AM