{"id":408937,"date":"2010-03-09T10:16:09","date_gmt":"2010-03-09T15:16:09","guid":{"rendered":"tag:www.economist.com,21005258"},"modified":"2010-03-09T10:16:09","modified_gmt":"2010-03-09T15:16:09","slug":"an-imf-for-europe","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/408937","title":{"rendered":"An IMF for Europe"},"content":{"rendered":"

OVER the weekend, Germany declared<\/a> its support for a European Monetary Fund, modelled on the IMF, that would address crisis conditions like those brewing in southern Europe. The French quickly signed on to the idea, indicating that the proposal might have legs. European Commission officials will take up discussion<\/a> of the policy today in Strasbourg. An EMF would address a sticky situation within the European fold\u2014the IMF is typically the source of emergency funding for countries looking to avoid debt crises, but IMF involvement in Europe would seriously undermine the image of the euro zone as a functioning entity.<\/p>\n

It’s worth pointing out that the idea for an EMF was introduced and discussed here at The Economist<\/em> a few weeks ago, in a guest Economics focus column<\/a> by Daniel Gros and Thomas Mayer and follow-up roundtable debate<\/a> on the proposal. Mssrs Gros and Mayer wrotes:<\/p>\n

\n

The difficulties facing Greece and other European borrowers expose two big failures of discipline at the heart of the euro zone. The first is a failure to encourage member governments to maintain control of their finances. The second, and more overlooked, is a failure to allow for an orderly sovereign default. To address these issues, we propose a new euro-area institution, which we dub the European Monetary Fund (EMF). Although the EMF could not be set up overnight, it is not too late to do so. Past experience (with Argentina, for instance) suggests that the road to eventual sovereign insolvency is a long one.<\/p>\n

The EMF could be run along similar governance lines to the IMF, by having a professional staff remote from direct political influence and a board with representatives from euro-area countries. Just as the existing fund does, the EMF would conduct regular and broad economic surveillance of member countries. But its main role would be to design, monitor and fund assistance programmes for euro-area countries in difficulties, just as the IMF does on a global scale.<\/p>\n<\/blockquote>\n

Readers interested in how such an organisation might work or potential ups and downs should have a quick read through the piece and the roundtable.<\/p>\n","protected":false},"excerpt":{"rendered":"

OVER the weekend, Germany declared its support for a European Monetary Fund, modelled on the IMF, that would address crisis conditions like those brewing in southern Europe. The French quickly signed on to the idea, indicating that the proposal might have legs. European Commission officials will take up discussion of the policy today in Strasbourg. […]<\/p>\n","protected":false},"author":4534,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-408937","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/408937","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/4534"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=408937"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/408937\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=408937"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=408937"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=408937"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}