IMF Stick Might not be as Effective in Europe

October 3, 2012 Share Print 0

The International Monetary Fund has a strong reputation as a lender of last resort. But what happens when the lender can’t possibly cover the bailout and is reduced to a monitoring entity? The answer is a tougher job for the IMF than what it has previously done in Asia and Latin America.

Mariano Rajoy the Spanish Prime Minister has taken IMF advice under consideration. Meaning he has listened to it, but has made clear even in the case of troika involvement he expects the Fund to be a monitor not to add to a list of already growing austerity demands.

The IMF has responded with various comments on its reports on Spain austerity measures. “Very ambitious goals” that will “likely be missed”

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Alfonso Esparza

Senior Currency Analyst at Market Pulse

Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.