Stevis on IMF hypocrisy
Matina Stevis has a brilliant discussion in the Wall Street Journal’s Real Times Brussels blog of the latest IMF rumblings on the eurozone debt crisis, implying a change of heart on sovereign debt restructuring, which we reported on last week. She goes through this paper bit by bit and found that the IMF is blaming the EU for most of the difficulties, as for example, in the Greek debt restructuring, when official creditors pressured the fund to accept a sanguine assessment of debt sustainability.
“It is interesting that the IMF, in its paper, adopts the tone of an outside observer to the events that have unfolded in the euro zone since it first got involved in 2010. The view from Brussels is that the relationship between the IMF and the German government was very close indeed, with the fund often advocating Berlin’s positions in multilateral negotiations throughout the crisis. The Cyprus negotiations were a prime example of this.
The implication that, in fact, the fund was pulled into a bloody euro-zone-made mess, kicking and screaming, isn’t very convincing when examined under this light. Germany’s own Parliament, the Bundestag, along with legislatures in the Netherlands and Finland, has effectively made the IMF’s sign off on debt sustainability in the bailout countries a prerequisite to approving the disbursement of aid tranches.”