Klaus Regling, the head of the euro zone΄s bail out funds, has lashed out at the International Monetary Fund (IMF), saying it made a mockery of Europe΄s budget rules and should not play a role in the longer term in euro zone rescue packages.
Regling told Germany΄s Frankfurter Allgemeine Zeitung in an interview to appear on Friday that the so-called troika of the IMF, European Central Bank and European Commission, which has come to the rescue of several euro zone states, should be broken up eventually.
In the short and medium term the IMF should remain involved because of its experience with help programmes, but long term “euro zone states must decide aid programmes themselves,” he told the paper.
Earlier this month the IMF said some aspects of the first aid package to Athens might have been handled better, starting with a restructuring of Greek privately held debt already in 2010. It added that delaying this had pushed an extra burden on euro zone taxpayers, triggering a war of words with the European Commission.
The IMF also admitted it miscalculated the effects of aggressive fiscal belt-tightening on Greece and said it would be more reluctant to impose pain on citizens of crisis-afflicted nations.
“The IMF has made a mockery of the stability and growth pact and claims it is responsible for growth. In doing this it is not only creating a false contrast, it is also showing above all it does not understand the rules of our single currency bloc,” Regling said.
Asked about the possibility of a further debt write down for Greece, Regling said further aid could only be discussed from the middle of 2014, once Greece had fulfilled certain conditions.
(source: Capital)
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