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The IMF is readying a bailout loan for Italy according to reports.
The IMF is preparing a 600 billion euros ($794 billion) loan for Italy, an Italian newspaper reported on Sunday.
The money will give Italian Prime Minister Mario Monti a window of 12-18 months to implement urgent budget cuts and growth-boosting reforms, La Stampa reported. Monti has been under pressure to speed up anti-crisis measures, Bloomberg reported.
Silvio Berlusconi, Monti's predecessor said that he had turned down an offer from the IMF. Christine Lagarde, the IMF chief, later denied the claim.
According to AFP:
"IMF intervention is inevitable but not enough," Paolo Guerrieri, economist at the College of Europe in Bruges, was quoted by La Stampa as saying.
"There is a grave risk of a liquidity crisis soon in the entire eurozone, including both sovereign states and banks," Guerrieri said.
"Italy and Spain need the necessary time to carry out reforms," he added.
Italy would pay an interest rate of 4 percent to 5 percent on the loan.