“The IMF Does Europe” offers a glimpse at the changing role the IMF is playing in the world economy. For the last decade the IMF’s neoliberal doctrine and reportedly harsh austerity tactics have led developing nations in need of financial assistance to turn to non-traditional lending sources, such as China, for help. In the wake of the financial crisis and a major image overhaul, the IMF has made a resurgence onto the lending scene – but this time not simply as a lender of last resort to developing nations.
Rather, Europe has become “ground zero for the biggest expansion of IMF lending and influence in years.” And as the article indicates, the stakes are huge. Finding the right balance of firmness and leniency with regards to budget cuts, tax hikes, and a myriad of other financial adjustments will be difficult, particularly given the greater political power wielded by nations such as Greece, Spain, Italy and Ireland. These nations play a much larger role in the global economy than the export-oriented, largely agricultural economies of the developing world. As the IMF enters this new lending frontier, it must look beyond its past experience to develop a comprehensive program – one that ultimately ends in repayment.