The International Monetary Fund is starting to break away ideologically from the rest on the troika on the topic of Greece. The IMF is supporting an extension to the agreement and debt write downs. Those two are vehemently opposed by the EC and the ECB. Germany in particular as the largest contributor to the current rescue package would be the most directly hit by the haircut.
The chief of the IMF makes a lot of sense in what she sees is the way to get Greece out of the crisis that has pushed debt above 130% of the country’s GDP. Everyone else in Europe, the sole exception being the head of the Bundesbank Weidmann, have used rhetoric and pain avoidance rescue packages to boost the troubled Greek economy.
The IMF has a track record for making hard choices both for the countries in trouble as for the debt holders. Recently I wrote about the IMF losing its stick and now based on the latest round of statements they might even be losing allies. The biggest difference is that while in the past the IMF has had mixed results with individual countries this would be a first where it is trying to work with an economic union. A Union that has a diverse make upâ€¦ some of the members might have a bigger stick than the IMF.