November 9, 2017 / 3:35 PM / a year ago

French central bank chief calls for a new euro zone crisis instrument

BRUSSELS, Nov 9 (Reuters) - The euro zone should agree on a mechanism to provide loans to countries hit by an economic crisis, without demanding reforms in return as in case of all the bailouts so far, the governor of the French central bank said on Thursday.

“I suggest creating a ‘Stabilisation Lending Instrument’ at the euro area level (..) that would provide loans to euro area member states faced with an asymmetric economic shock,” Francois Villeroy de Galhau told a conference in Brussels.

He said the new loan instrument should be available without triggering a bailout programme and austerity measures, but would be available only to states that respect EU fiscal rules that set a limit on government deficit and debt. (Reporting by Francesco Guarascio; editing by Jan Strupczewski)

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