The IMF is Not Asking Greece for More Austerity


By Maurice Obstfeld and Poul M. Thomsen

Versions in عربي (Arabic); Français (French); Deutsch (German); ελληνικά (Greek); and Español (Spanish)

Greece is once again in the headlines as discussions for the second review of its European Stability Mechanism (ESM) program are gaining pace. Unfortunately, the discussions have also spurred some misinformation about the role and the views of the IMF. Above all, the IMF is being criticized for demanding more fiscal austerity, in particular for making this a condition for urgently needed debt relief. This is not true, and clarifications are in order. Continue reading

Risks to Financial Stability Increase, Bold Action Needed


By José Viñals

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Our latest update of the Global Financial Stability Report has three key messages.

First, financial stability risks have increased, because of escalating funding and market pressures and a weak growth outlook.

Second, the measures agreed at the recent European leaders’ summit provide significant steps to address the immediate crisis, but more is needed. Timely implementation and further progress on banking and fiscal unions must be a priority.

And third, time is running out. Now is the moment for strong political leadership, because tough decisions will need to be made to restore confidence and ensure lasting financial stability in both advanced and emerging economies. It is time for action.

Now, why have financial stability risks increased?

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IMF Welcomes New Eurozone Understanding on Greece


The IMF has welcomed the agreement by Eurozone finance minister on a new support package for Greece.

After talks that went on until the early hours of the morning in Brussels, IMF Managing Director Christine Lagarde said on February 21 she welcomed the “proposed understandings reached today by the Euro Group to support Greece.”

“The combination of ambitious and broad policy efforts by Greece , and substantial and long-term financial contributions by the official and private sectors, will create the space needed to secure improvements in debt sustainability and competitiveness,” she said in a statement. “These actions, together with a significant strengthening of the financial sector, will pave the way for a gradual resumption of economic growth.”

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