BERLIN, March 10, 2010 (AFP) - France and Germany agree that idea of a European-style IMF is not aimed at helping Greece now but is a medium-term project, France's prime minister said Wednesday after talks in Berlin.
    "We are in agreement about discussing instruments for the medium term if crises of this kind (like Greece) repeat themselves, including a proposal on the table for a European monetary fund," Francois Fillon said after talks with Chancellor Angela Merkel.
    "We see this proposal as something ... for the medium term."
    Merkel, for her part, said that an EMF would be "at the end of a chain."
    "The details still have to be nailed down by the experts, but the EMF is, so to speak, at the end of a chain of sanctions that I see as necessary.
    "And the highest priority is to ensure that such a situation doesn't happen again," she told reporters.
    Merkel also said that she had talked with Fillon about "more effective sanctions ... that have more teeth" against eurozone members that run up dangerously large budget deficits.
    Sparked by the Greece crisis, discussion of the "EMF" has gathered steam in recent days after it was floated by German Finance Minister Wolfgang Schaeuble in a weekend newspaper interview.
    Merkel said late on Monday the idea was "good and interesting" but that it would have to be accompanied by changes to the EU's governing treaties.
    A day later, Merkel stressed the fund would only work if "sanctions" were imposed to penalise spendthrift states.
    But other figures have been less than keen, including Axel Weber, Germany's central bank chief, who called the idea "unhelpful."
    The European Central Bank's chief economist Juergen Stark warned that the scheme "could be very expensive, create the wrong incentives and finally, burden countries (that have) more solid public finances."
    French Economy Minister Christine Lagarde called the idea on Tuesday an "interesting approach" but one that "does not appear to me to be the absolute priority in the short-term."
    The plans are being developed as a possible way to assist Greece, and any other eurozone country that comes close to defaulting on its debt and to get around the fact that European rules currently forbid any bailout.