IMF bounces back to life
Thursday, 13 May 2010
From Fazle Rashid
NEW YORK, May 12: The International Monetary Fund (IMF) which was not very long ago considered to have lost its relevance bounced back to life with its sagging capital base receiving fresh infusion of cash. The IMF is now presenting itself as the indispensable institution in the sovereign debt crisis.
The Fund played a pivotal role in Greece convincing the European Union (EU) to dole out more cash and give the bankrupt nation an extended time to put is faltering economy back on normal track via spending cuts and assisted in Europe's nearly $1.0 trillion rescue package for other ailing economies.
Trying to shed its old image as a hidebound policy task master, the Fund is refashioning itself as the investment bank of multilateral institutions doing whatever it takes to get the deal done, the New York Times (NYT) in a report said today. Investors, of course, have started raising question whether the IMF plan would be enough to enforce fiscal discipline in Europe
Protesters and politicians in Greece and other European countries with huge debts have been enjoying more generous government benefits than they can afford. No mass rally and no bailout fund will change that. Only benefit cuts and tax increase can, an analyst said. The situation in the United States is no better. The federal debt is projected to equal 140 per cent of the gross domestic product (GDP). Greece debts in comparison equals about 115 per cent of its GDP.
The finances of the most advanced economies are in a worse state than at any point. With the rare exception of Italy, Germany, Sweden and Denmark, the rest of the nations are facing deficit. Portugal, France, Spain Greece, Ireland, Canada, Japan, Iceland, Britain and the United States are all facing budget deficit. Japan is facing a deficit of 5.6 per cent, Britain 6.8 per cent and the United States 7.3 per cent, the NYT reported today.
The IMF called upon Eurozone countries to move aggressively for integrating cross border budgetary coordination. Strauss Kahn, the IMF chief underscored the urgency of evolving short term fiscal transfer among member states to avoid a recurrence of the crisis that has battered the financial markets. Euro fell 0.7 per cent against the dollar. Government bonds of Greece and Portugal surged high as European Central Bank (ECB) began buying them.
NEW YORK, May 12: The International Monetary Fund (IMF) which was not very long ago considered to have lost its relevance bounced back to life with its sagging capital base receiving fresh infusion of cash. The IMF is now presenting itself as the indispensable institution in the sovereign debt crisis.
The Fund played a pivotal role in Greece convincing the European Union (EU) to dole out more cash and give the bankrupt nation an extended time to put is faltering economy back on normal track via spending cuts and assisted in Europe's nearly $1.0 trillion rescue package for other ailing economies.
Trying to shed its old image as a hidebound policy task master, the Fund is refashioning itself as the investment bank of multilateral institutions doing whatever it takes to get the deal done, the New York Times (NYT) in a report said today. Investors, of course, have started raising question whether the IMF plan would be enough to enforce fiscal discipline in Europe
Protesters and politicians in Greece and other European countries with huge debts have been enjoying more generous government benefits than they can afford. No mass rally and no bailout fund will change that. Only benefit cuts and tax increase can, an analyst said. The situation in the United States is no better. The federal debt is projected to equal 140 per cent of the gross domestic product (GDP). Greece debts in comparison equals about 115 per cent of its GDP.
The finances of the most advanced economies are in a worse state than at any point. With the rare exception of Italy, Germany, Sweden and Denmark, the rest of the nations are facing deficit. Portugal, France, Spain Greece, Ireland, Canada, Japan, Iceland, Britain and the United States are all facing budget deficit. Japan is facing a deficit of 5.6 per cent, Britain 6.8 per cent and the United States 7.3 per cent, the NYT reported today.
The IMF called upon Eurozone countries to move aggressively for integrating cross border budgetary coordination. Strauss Kahn, the IMF chief underscored the urgency of evolving short term fiscal transfer among member states to avoid a recurrence of the crisis that has battered the financial markets. Euro fell 0.7 per cent against the dollar. Government bonds of Greece and Portugal surged high as European Central Bank (ECB) began buying them.