In spite of what you hear by the nanny-zone Eurocrats, the rifts keep getting wider and the odds the Merkozy agreement gets tossed to the dogs rises every day.
Today the UK put a nail in the coffin of more money to the IMF and Sweden may do so as well. Please consider Euro zone IMF lending plan in danger as UK declines
European finance ministers looked unlikely to reach a target of boosting IMF resources by 200 billion euros to ward off the debt crisis on Monday, after Britain said it would not take part in a plan aimed specifically at helping the euro zone.
In a three-hour conference call, ministers also assessed plans for tighter euro zone fiscal rules - a new 'fiscal compact' - that policymakers hope will insulate the 17-country currency zone against a repeat of the two-year debt crisis.
Treasury sources said Britain had made it clear on the call it would not participate in the plan to increase IMF resources by up to 200 billion euros, with 150 billion of coming from euro zone central banks.
While Sweden said it would take part, with conditions, Britain's decision to stay on the sidelines means it is unlikely the headline goal will be reached. Ministers had set an informal deadline of Monday to arrive at the 200 billion figure, which was agreed by EU leaders at a summit on December 8-9.
Speaking during testimony to the European Parliament, ECB President Mario Draghi praised EU efforts to forge a new 'fiscal compact' as a solid base for responding to the crisis, and called the euro an "irreversible" project.
Finland's opposition, if not overcome, could scupper efforts to bring the ESM into force in July 2012, a year earlier than planned, to step up crisis-fighting efforts.
While EU leaders agreed at their last summit on the desire to boost IMF resources, there are doubts about whether the scheme will work, with not just Britain unenthusiastic, but the United States and Germany's Bundesbank too.
"Washington cannot make bilateral loans available to the IMF without Congress approving it," German Finance Minister Wolfgang Schaeuble told German radio. "There's no chance of that and the American government has always made that clear."
Market response to measures agreed at the December summit has been cool, mainly because of the reluctance of the ECB to step up bond purchases and declare its readiness to do so.
As a result, ratings agency Fitch concluded on Friday that a 'comprehensive solution' to the crisis was technically and politically beyond reach. It warned that six euro zone economies, incl