On Monday the IMF cut its global growth forecast this year to 3.3 percent, and marked down its estimate for next year to 3.9 percent.

(Kazan, January 25, Tatar-inform). International Monetary Fund (IMF) Managing Director Christine Lagarde called on Wednesday to merge the European Financial Stability Fund (EFSF) and the European Stability Mechanism (ESM) both worth 650 billion euros (847.22 billion U.S. dollars) to regain confidence of turbulent global financial markets, reports Xinhua.

"If the two (funds) could be put together and create a common European pot, it would be a very strong signal of confidence in Europe," Lagarde told the local broadcaster Europe 1.

"But, there must have common rules, a collective will shown by a line of defense," she added.

Asked if the proposal would be treated at the European Union (EU) summit scheduled for Monday, Lagarde said, " It's the position of the IMF" and "It is on the table of EU heads of state."

Despite an eventual default of the debt-ridden Greek government, Lagarde kept faith in "the future of the euro and the euro area", urging the European partners "to defend and be committed further to the euro area."

On Monday the IMF cut its global growth forecast this year to 3.3 percent, and marked down its estimate for next year to 3.9 percent.

The eurozone economy would contract 0.5 percent in 2012 before returning to meager growth of 0.8 percent in 2013. Growth in developing economies was also expected to moderate due to "the worsening external environment and a weakening of internal demand."

"The end of the year will be better than the beginning ... if the right decisions are made to boost competitiveness, growth and apply a stringent fiscal policy," the former French economy minister estimated.