Tuesday, March 16, 2010

Roubini Post: A Little EMFathy with Greece

This is Monday's Hurriyet Daily News article; Europe Economonitor is just republishing it, but I just wanted to cross-link for the readers who might have missed it the first time around...

But while I am at it, I have a few things to say on this issue. It became obvious that while the EMF proposal is more about leaving the Euro Zone than helping Greece & other cash-stricken countries and founding IMF substitutes, the latter has got some attention as well.

For example, in early March, blog reader Sahika Balbay of Is Bank noted the following (I've liberally translated her Turkish email):
What I am wondering is when founding IMF-substitutes will be discussed. Founding a new financial system should not be left to an western-skewed organization like the IMF.
Sahika further thinks that countries/regions with problems in their SWFs, trying for a "reputably correct" way out in search of financing would try to establish IMF alternatives.

I am leaning towards the argument that regionalizing the IMF would be sub-optimal. But I also think that an EMF would be a useful complement to the IMF for the EU if it is set up right (BTW, I have only recently been aware of Daniel Gros's writing style, although I had heard of his name before; he is quickly becoming a favorite of mine on EU stuff).

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