Speaking after talks with French Prime Minister Francois Fillon on Wednesday in Berlin, German Chancellor Angela Merkel reiterated her support for an International Monetary Fund (IMF)-style body in the euro zone that would help bankruptcy-threatened states "as the last resort".

    She said the details still have to be pinned down by experts, but the EMF is necessary at the end of a chain of sanctions that would "have more teeth" against euro zone nations that run up extremely high budget deficits.

    Fillon said France and Germany are in agreement about discussing instruments for the medium term if Greece-like crises repeat themselves, including a proposal on the table for an EMF.

    In his first reaction to the suddenly heated debate about a crisis fund over the past few days, European Central Bank (ECB) chief Jean-Claude Trichet told reporters in Frankfurt on Wednesday that he does not reject the idea at this stage but has to look at the details.

    "At the present moment, the governing council of the ECB has no opinion," he said.

    The plan gained steam after German Finance Minister Wolfgang Schaeuble threw his weight behind the idea in a newspaper interview over the weekend.

    "We're not talking about a competing institution to the IMF, but for the internal structural design of the euro zone, we need an institution that has the experience of the IMF and similar penetration power," Schaeuble told the German newspaper Welt am Sonntag.

    Analysts have noted that a monetary fund for the euro nations only makes sense if it, like the IMF, grants emergency financial assistance through loans or guarantees to nations in distress.

    In return, it could give guidance in the financial and economic policy of the beneficiary countries. In such a case, the so-called "no bail-out clause" of the EU Maastricht Treaty, which excludes financial help for a crisis-hit country, should have to be revised.

    German government spokesman Christoph Steegmans noted on Wednesday that the EMF plan is a long-term project that would make amendment to the Maastricht Treaty if necessary and it requires consensus among EU member states.

    Finance Ministry spokesman Michael Offer meanwhile said that the plan is not aimed at solving the Greek crisis in the short term but at preventing future crises. It would complement and improve existing rules for the long run.

    Offer also said Germany would nail down its proposals and examine which measures could be adopted without modification of the EU treaties, for example whether existing surveillance and prevention tools could be used more consistently.

    The scheme however has met strong opposition from experts like German central bank chief Axel Weber, who said on Monday that "new institutions won't help if the existing ones are ignored."

    ECB chief economist Juergen Stark has also rejected the idea. "Such a mechanism would not be compatible with the business basis of the monetary union," he argued in a guest commentary for the German business daily Handelsblatt.

    "It would be the start of a European financial compensation that could be very expensive, set the wrong incentives and, ultimately, burden countries that have more solid public finances," he warned.

    German Economy Minister Rainer Bruederle told reporters in Berlin on Wednesday that a potential EMF should not serve as a financial transfer system, shifting money from the euro zone's richer states to poorer ones.

    A country threatened by state bankruptcy should only be allowed to apply for a possible EMF help if it could no longer raise fresh money in the capital markets and the money from EMF should only be used to help reduce state debts, Bruederle was quoted by the German news agency DPA as saying in a letter addressed to Schaeuble.