Publication: Survival: Global Politics and Strategy June–July 2017
16 May 2017
Tangled Governance: International Regime Complexity, the Troika, and the Euro Crisis
C. Randall Henning. Oxford: Oxford University Press, 2017. £25.00. 320 pp.
Why did the Europeans involve the International Monetary Fund (IMF) in the bailouts of Greece, Ireland, Portugal, Spain and Cyprus? After all, Europe is a rich place; the countries needing support share the euro as a common currency and so can draw upon the resources of the European Central Bank (ECB); and Europe boasts a ‘small army’ of macroeconomists, many of whom have worked for the IMF at some point in their careers (p. 1).
The standard explanations revolve around expertise, credibility, trust and money. The IMF has long experience working with governments in distress, and has the authority that comes alongside its super-senior-creditor status. It is less political than the European Commission and less constrained than the ECB. It also has additional resources to lend to distressed countries. While European governments were initially reluctant to involve the IMF in euro-area business, they soon recognised the advantages that IMF involvement would bring.