Except Greece probably doesn’t qualify under normal IMF standards, and the IMF would have to get short euro to make the payment.
And ideologically it means ceding control of EU macro policy to an external international institution with strong US influence.
Nor does the macro work, as the ‘strict enough conditions’ imposed will further weaken demand in Greece and the rest of the EU.
Also, the rapidly expanding deficit of Greece has benefited the entire EU and a sudden reversal will reverse those forces.
Likewise, leaving the EU would be contractionary/deflationary for the EU.
But if they all believe the IMF is the way to go there’s a good chance it happens.
Meanwhile, Greece and the rest of the eurozone is being revealed as necessarily being in a continual state of ponzi that demands institutional resolution
of some sort to be sustainable.
By John Fraher
Feb. 8 (Bloomberg) — Former European Central Bank Chief Economist Otmar Issing said the International Monetary Fund may be better suited to rescuing Greece than the European Union, the New York Times said, citing an interview.
“I don’t think that the EU can impose the kind of sanctions that would be needed, and it would make Brussels too unpopular,” the newspaper cited Issing as saying in an article published Feb. 6. “A better way is for Greece to approach the IMF. It is the only institution that can impose strict enough conditions.”
Issing said he doesn’t see support “in Germany or elsewhere” for a bailout that would involve “a more or less disguised transfer of taxpayer money,” the paper said.
Issing said leaving the euro region would be “economic suicide” for Greece, though he dismissed the idea that it would hurt the euro region as “misguided,” the paper said.