Market Commentary and Intraday News
IMF: Euro Crisis Made Designing Of Bailout Programs More Complex
274 days ago
(RTTNews) - The International Monetary Fund has acknowledged that the nature of the Eurozone debt crisis has made both forecasting and program design more complex. At the same time, it stressed on the need to enhance country ownership and transparency of its lending programs.
IMF noted that it faced new challenges, particularly in the current euro area crisis, where the size of the debt burdens, the systemic nature of the crisis, and the need for coordination across institutions made both forecasting and program design more complex.
"Program design has been complicated where countries faced high debt burdens, sustained loss of market access, low growth, and competitiveness issues, and where the constraints of a currency union limited policy options," the staff said in a report titled '2011 Review of Conditionality', published Monday.
The report suggested that the IMF should try to enhance country ownership and transparency of lending programs through more discussion of alternative policy options, greater clarity in written assessments, and by tapping new avenues to collect external views.
"Reforms often involve near-term costs yielding significant long-term benefits that should not be neglected in the analysis," it noted.
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