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Bundensbank Warns Against IMF Aid To Countries With Structural Problems

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The Deutsche Bundesbank Monday warned against using the International Monetary Fund to tackle Greek debt crisis, Dow Jones Newswires reports.

In its monthly report for March, the German central bank said IMF can only loan countries with a temporary need for foreign currency.

"According to its mandate, [the IMF] can only use the reserves at its disposal to overcome short-term balance of payments problems," the Bundesbank said.

"By contrast, a financial contribution to the solution of structural problems that have no implicit need for foreign currency--such as the direct financing of budget deficits or the financing of bank recapitalizations--is not to be reconciled with [the fund’s] monetary mandate."

Still, German Chancellor Angela Merkel is open to aid for Greece from the International Monetary Fund in an emergency, her spokesman said Monday.

"In this case, financial aid from the IMF is definitely a topic for the chancellor and the German government," spokesman Ulrich Wilhelm said Monday according to the news agency.
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