With Greece and other troubled euro-zone economies having surrendered monetary policy to the European Central Bank, the crisis brewing in Europe seems tailor made for the "new IMF" to ride to the rescue. But EU leaders will try hard to keep the IMF out for entirely self-interested reasons, which is bad news for Greece – and for anyone who cares about global financial stability.
WASHINGTON, DC – Traditionally, “you should go to the IMF” was not something you would say to friendly neighbors and close allies. Over the past few decades, the International Monetary Fund became associated with excessive fiscal austerity, extreme political insensitivity, and – since the Asian financial crisis of 1997-1998 – with an out-and-out stigma. Countries borrowed from the IMF only under duress, when all else failed – and when there was simply no other way to pay for essential imports. (For Iceland in the fall of 2008, for example, the only alternative to IMF financing was to eat locally obtained goods, which mostly means fish.)
WASHINGTON, DC – Traditionally, “you should go to the IMF” was not something you would say to friendly neighbors and close allies. Over the past few decades, the International Monetary Fund became associated with excessive fiscal austerity, extreme political insensitivity, and – since the Asian financial crisis of 1997-1998 – with an out-and-out stigma. Countries borrowed from the IMF only under duress, when all else failed – and when there was simply no other way to pay for essential imports. (For Iceland in the fall of 2008, for example, the only alternative to IMF financing was to eat locally obtained goods, which mostly means fish.)