Tuesday, November 8, 2011

will IMF oversee prevent European sinkhole?

To read these articles click here and here

“In an interview on the sidelines of the summit, Ms. Lagarde said that ‘friendly pressure’ had been placed on Italy to accept the I.M.F. as a monitor. Because Italy is not under an I.M.F. bailout, the only way the fund could act as a monitor was if Italy invited it to do so, she added.”

In an attempt to stop the European financial crisis from spreading to Italy, Italy announced that it would allow the International Monetary Fund (IMF) to “monitor” their books every three months to make sure Italy follows its austerity plan.

Hopefully this overseeing will help reinvigorate Italy’s listless economy. There are fears that an economically lost Italy would pull Europe into a mudslide from which there is no escape.

Italy’s debt is about $2.5 trillion. However, inhabitants of the country are trying to see it in a brighter light than the rest of Europe asa manageable projected deficit of 3.9 percent of the gross domestic product for 2011 and dropping; an economy that is growing, albeit anemically,” according to the New York Times. This difference of opinion is the basis for the rift between the rest of the EU and Italy. Italy does not see itself in debt; however, viewed as a whole, Italy’s problems affect the rest of the EU.

With the pressure to allow the IMF in, Italy is admitting its identity crisis. If Italy has been seeing itself as healthier than in reality, then the IMF could not come at a better time. It would probably not take long for Italy to become the next Greece.

The overseeing is slightly embarrassing and speaks to mistrust of Italy to follow its own plans; though Italy tried to play off the IMF oversee as its own choice “friendly pressure” behind closed doors indicates hesitance on Italy’s part.

If Italy is so pivotal to the rescue of Europe, then this IMF oversee is totally necessary to help keep the stagnating economy above water.

-Rosie Limbug

No comments:

Post a Comment