The dog that did not bark? An evaluation of IMF surveillance of the euro area

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.

During this event a report by Jean Pisani-Ferry, André Sapir and Guntram Wolff, analysing the IMF’s surveillance of the euro area, was presented by Wolff. The authors found 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.

Mr. Wolff's presentation was followed by a commentary by Mark Hallerberg, Director of Fiscal Governance Centre at the Hertie School of Governance.

Hosted by the Fiscal Governance Centre at the Hertie School of Governance in cooperation with Bruegel.