WASHINGTON -- Calls for a "gigantic" increase in the size of Europe's bailout fund are unreasonable, because the fund will not solve all of the region's problems, Antonio Borges, head of the International Monetary Fund's European division, said Friday. The Group of 20, composed of the world's top economies, has been pressing Europe to leverage the size of the European Financial Stabilization Fund in concert with the European Central Bank. "The idea that we should leverage the EFSF to the hilt, $2 trillion...is not serious in our view," Borges said at a news conference. The IMF official added more substance to IMF chief Christine Lagarde's argument that financial markets are ignoring Europe's progress on lowering its debt burden. He said that Spain has made "remarkable" progress to address its debt levels. "It is a great pity this is not recognized by markets and to a certain extent the same in Italy," where the public accounts have never been as good as they are now, he said. "We are acting to make sure current fears that exist with respect to Italy and Spain do not spread to other areas of the continent and to the financial system," Borges noted.
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