“The International Monetary Fund (IMF) acknowledged on Monday it faced “serious challenges” in designing bailout programs for troubled euro zone countries mainly because it was restricted by the rules of the 17-member currency zone.
Analysts and some IMF member countries have expressed concern that the Fund has compromised on tough conditions in its bailouts in Europe where it has been part of a “troika” of international lenders in Greece, Ireland and Portugal.
But the IMF preliminary assessment found that the Fund actually had to impose extensive structural conditions on euro zone countries—where deep labor and market reforms were needed—compared to programs elsewhere.
“While it is difficult to judge whether all the conditions were critical, the increase in the number and depth of (Euro Area) conditions warrants scrutiny,” according to the review, which analyzed conditions attached to 159 IMF programs in the decade to September 2011.”
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