The International Monetary Fund is inserting itself more forcefully into Europe's efforts to resolve its debt crisis, hoping to stem a contagion that is spreading worldwide and threatening global growth. Or, to put it another way, could the problems now hanging over eurozone banks and bond markets be about to get worse, due to the state of the sovereign CDS sector?
Uncertainty is turning into frustration and near-panic among policymakers outside Europe as larger European economies such as Italy, Spain and France come under attack by financial markets and bank funding stresses worsen.
Until now, Europe has tried to navigate its way out of the two-year crisis on its own and the IMF has worked as a partner in a rescue "Troika" alongside the European Commission and European Central Bank in bailing out debt-stricken Greece.
But patience, both among officials outside of Europe and in markets, is running thin with what many view as Europe's painfully slow decision-making process.
Three steps taken this week could strengthen the IMF's role in handling the crisis.
The IMF said on Thursday it would not be joined by EU or ECB officials when it conducts an in-depth review in late November of Italy's economy and the fiscal and structural reforms needed to fend off the crisis there, a fresh step in the global lender's approach.
By going it alone, the IMF would assert its leadership role and potentially instill greater market confidence.
http://www.reuters.com/article/2011/11/18/us-imf-europe-idUSTRE7AG2NM20111118
http://tinyurl.com/8335zsv
Sunday, 20 November 2011
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