Wall Street Journal
November 13, 2012
The International Monetary Fund, criticized for decades for prescribing harsh medicine to heavily indebted governments, is pressing reluctant euro-zone governments to go easy on Greece.
It is a fight the IMF will be hard-pressed to win. It is scaling down the money it lends to Greece, and, as it does so, its influence weakens. It has lent Greece about €22 billion ($28 billion), and has set aside another €26 billion to lend until 2016. The country's main creditor group—the 16 other euro-zone governments led by Germany—are calling most of the shots.
IMF officials have repeated that they want to see a realistic agreement in place to back up the release of a new slice of Greek aid.
The institution has become increasingly skeptical about the euro zone's prescription of slashing budgets to get debts under control because it has exacted a heavy toll and destroyed economic growth.
It also argues that the credibility of Greece's economic program—and returning the economy to health—hangs on getting Greece's debt down to manageable levels.
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