OECD says Europe should boost financial buffers to at least €1 trillion

PanARMENIAN.Net - The 17 countries that use the euro should boost their financial buffers to at least €1 trillion ($1.3 trillion) to help the struggling currency union return to growth, the head of the Organization for Economic Cooperation and Development (OECD) said Tuesday, March 27.

According to AP, Angel Gurria, the secretary-general of the Paris-based international development body, said current commitments to the rescue funds, which are limited to €500 billion ($664 billion), are not enough to restore market confidence in the eurozone.

Europe needs "the mother of all firewalls," he said at a news conference in Brussels, where he was flanked by Olli Rehn, the EU's economic affairs commissioner, who has also been pushing for a larger bailout fund.

A large, permanent bailout fund can give governments the breathing space to focus on kickstarting growth and restoring the competitiveness of their economies, Gurria said. As well as shoring up the financial defenses, Gurria pointed to a raft of economic reforms that individual countries should enact.

According to the OECD's annual report for the eurozone, which was released Tuesday, vulnerable states may need more than €1 trillion in aid over the coming two years and Gurria said eurozone finance ministers should take a decision to boost their bailout funds at their meeting in Copenhagen on Friday.

Germany, the bloc's largest economy, signaled on Monday that it would support an increase to around €700 billion ($929 billion), but only until some €200 billion in loans already promised to Greece, Ireland and Portugal have been paid back.