With a two-day EU summit beginning in Brussels tomorrow, the International Monetary Fund is calling on Italy and Spain to apply for eurozone assistance, hoping to cut losses in Europe's debt crisis. The eurozone is on the verge of establishing an environment that would ensure both countries can continue borrowing amid economic reforms, IMF chief economist Olivier Blanchard tells an Italian paper, calling a short-term plan "crucial." But while Spain appears ready to ask for eurozone aid, Italy has shrugged off the idea, Reuters reports.
Rome argues that Spain's application for aid should be sufficient. Meanwhile, Germany appears to be warming to the idea of a credit line for Spain, insiders say; a decision might not come until November. In the meantime, tomorrow's summit will address the possibility of establishing a single banking boss and ideas for further integration among EU countries. Those ideas include creating a currency commissioner who could veto national budgets—the brainchild of Germany's finance minister—as well as a separate budget for the eurozone. Another option, voiced by French President Francois Hollande: Monthly eurozone economic summits.