An evaluation of IMF surveillance of the euro area. Bruegel Blueprint 14, 31st October 2011

Pisani-Ferry, Jean and Sapir, André and Wolff, Guntram B. (2011) An evaluation of IMF surveillance of the euro area. Bruegel Blueprint 14, 31st October 2011. [Policy Paper]

Preview

PDF - Published Version Download (690Kb) | Preview

Abstract

The euro-area crisis has exposed deep deficiencies in the governance of European Economic and Monetary Union. However, crisis prevention in, and surveillance of, the euro area are not only the responsibility of European authorities. As members of the International Monetary Fund, all euro-area countries are also subject to regular bilateral IMF surveillance. The currency union as a whole is also subject to regular IMF surveillance. This report analyses the IMF’s surveillance of the euro area. We find that it suffered from severe shortcomings in the run-up to the financial crisis, but after the start of the crisis in 2008, IMF surveillance of the euro area greatly improved, with the IMF correctly proposing measures to counter depression risks and warning about banking sector problems. By the time the sovereign-debt crisis hit the currency union in early 2010, the IMF was ready to play an influential role. The slow European response meant this was indispensable.

Actions (login required)