European Socialists call for fund to save Greece from speculators

(BRUSSELS) - European Socialists on Tuesday called for the creation of a fund, managed by the European Investment Bank (EIB), to help Greece and others ward off speculators as they tackle budget crises.

Such a fund would provide "a gun on the table for all speculators to see," Greek MEP Stavros Lambrinidis said.

President of the Party of European Socialists (PES), Poul Nyrup Rasmussen said "it is a plan that is not just about Greece. It is about setting up a long-term crisis management mechanism to strengthen the eurozone and to guarantee long-term stability.

"The very purpose of our plan is that member states do not end up paying financial speculators but that a fair price is ensured," Rasmussen added.

Under the scheme the EIB, Europe's lending arm, could borrow from the market at a reasonable interest rate. Countries in crisis could then borrow these funds at a similar rate as others are able to, the Socialists said in a statement.

Such a system "protects the eurozone against speculative attacks on sovereign debt and the single currency," with the prime objective to "create conditions in which a sovereign default from any eurozone member state is clearly judged impossible by the markets," it added.

Speculators, Lambrinidis said "are like home insurance salesmen who profit not only from selling you the insurance but also if your house burns down."

The EIB said last week that under current rules it cannot participate in a rescue plan for Greece.

Greece is expected to unveil additional austerity measures on Wednesday in a bid to reassure the European Union and foreign investors.