Merkel says 'EMF' proposal 'good and interesting'

(BERLIN) - Chancellor Angela Merkel said Monday that the idea of an IMF-style European monetary fund was "good and interesting" but that it must be accompanied by changes to the EU's governing treaties.

"It leaves lots of questions open of course, but I find the idea good and interesting," Merkel told reporters in Berlin.

"But of course we are going to have to ask ourselves who will pay into it, how independent it will be from the European Commission etcetera.... Without treaty changes we can't form such a fund."

She said that Greece's fiscal crisis had shown that the eurozone did not possess the right instruments.

"That means that the treaties must be changed. This means that we have to talk about how the Lisbon Treaty can be changed... so that the eurozone can better react. We will have to have this discussion," Merkel said.

The European Commission, the body running the 27-nation European Union's day-to-day affairs, said on Monday that it would float proposals within 24 hours to create a European version of the International Monetary Fund.

The plans are being developed as a possible to 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.