Lagarde Wrong to Urge Mutualized Debt, Germany’s Seehofer Says

International Monetary Fund Managing Director Christine Lagarde is wrong to press for measures that would result in a mutualization of euro-region debt, Bavarian Prime Minister Horst Seehofer said.

Shared liability for sovereign debt and a banking union, as Lagarde urges, would remove pressure on governments to carry out economic policy changes, Seehofer wrote in an opinion piece in Germany’s Handelsblatt newspaper.

The German constitution should be changed to permit referendums on decisions to deepen European integration and transfer powers to European institutions, Seehofer said.

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