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Unsustainable debt and the political economy of lending: constraining the IMF’s role in sovereign debt crises

The timely resolution of severe debt crises has long been one of the most difficult challenges for global financial cooperation. Focusing on the case of Greece, the paper to be presented at this event examines how the euro crisis precipitated large International Monetary Fund (IMF) loans that violated the framework developed on the basis of the preceding decade to prevent a costly delay in restructuring.

The paper reveals that safeguards meant to prevent the IMF from providing support for crisis countries without a reasonably clear path to debt sustainability failed. In fact, changes made in the context of the euro crisis to the IMF’s framework for lending in severe sovereign debt crises will weaken the IMF’s effectiveness in future crises. The paper concludes with four suggestions for how to re-establish an adequate framework for IMF intervention in severe debt crises in the future

Speakers

  • Susan Schadler, Senior Fellow at CIGI and former Deputy Director of the IMF’s European Department
  • Discussant: André Sapir, Senior Fellow at Bruegel and Professor at ULB
  • Chair: Zsolt Darvas, Senior Fellow at Bruegel

Materials

Download Unsustainable debt and the political economy of lending: constraining the IMF’s role in sovereign debt crises by Susan Schadler Unsustainable debt and the political economy of lending: constraining the IMF’s role in sovereign debt crises

Read Susan Schadler's article on this topic The IMF and the legacy of the Euro crisis

Practical details

Venue: Bruegel, Rue de la Charité 33, 1210 Brussels
Time: Monday 25 November 2013, 12:45 - 14:30 (A light lunch will be served before the event)
Contact:Matilda Sevón, Events Coordinator - matilda.sevon[at]bruegel.org