[FR] Euroquestions #104 | Does Europe have alternatives to the IMF for rescuing Member States in budgetary and financial crisis?
Faced with concerns about the sustainability of French public debt, some are talking about possible intervention by the IMF, often mistakenly perceived as ‘putting the country under supervision’. However, the European Union has its own financial solidarity instruments, notably the European Stability Mechanism (ESM), with €500 billion available, which can intervene alone or in coordination with the IMF, as was the case during the eurozone crisis between 2010 and 2014. The ESM imposes conditions similar to those of the IMF, through macroeconomic adjustment programmes. The ECB complements this mechanism with tools such as Outright Monetary Transactions (OMT) and the Transmission Protection Instrument (TPI), which allow it to intervene in the markets in the event of tensions, subject to strict criteria. These European mechanisms offer Member States in difficulty a credible alternative to IMF intervention, while highlighting the need for Europe to strengthen its economic governance and preserve the universality of multilateral institutions in a context of global fragmentation. Is recourse to the IMF a real threat or a political ploy in the debate on French public finances? Can the ESM really act as a European shield against the budgetary crises of Member States?
We are pleased to welcome Pierre Jaillet, associate researcher at the Jacques Delors Institute in monetary policy, to discuss these issues.
