Lagarde warns governments not to depend on easy cash forever

EUROPE’S governments must push ahead with the banking union plans to solve some of the economy’s underlying problems, International Monetary Fund (IMF) boss Christine Lagarde said yesterday.

She warned them off permanently relying on easy money from the European Central Bank (ECB) which has mitigated some of their problems in the short term.

“We very much think of the Eurozone as a beautiful ship that has been built, nurtured for the soft seas, but which is not yet completely finished for the rough ones,” Lagarde told a conference in Paris.

“A lot has been done in relation to banking union. If I have a message today it is that that particular part of the ship needs to be finished, needs to be completed and speed is of the essence.”

French finance minister Pierre Moscovici told the same event he wants a map towards the creation of a federal Eurozone budget. He said such a budget could be used to jointly finance unemployment insurance schemes and could be paid for using a variety of national or joint resources.