BERLIN (Dow Jones) – A study by the Institut der deutschen Wirtschaft Köln (IW Köln) on state bankruptcies came to the conclusion that in the case of a potential insolvency of a Euro-state rescue from the International Monetary Fund (IMF) was the best variant. (Photo: ddp)
This tells the newspaper "Die Welt" in its Saturday edition.
Three IW researchers have analyzed, therefore, how great is the threat of state bankruptcy in Europe and examines possible rescue scenarios, "All in all, seems the institutional framework of the European Monetary Union (EMU) for the prevention of financial crises are largely invalid state," the researchers write in it.
It was questionable whether there have the "Euro-area institutions, enforcement and sanction the necessary strength to look for budgetary discipline." For this reason, the researchers propose to consult in the event of insolvency of a euro country to the International Monetary Fund (IMF) for help.
Many politicians shudder against allowing the fund to the euro zone, as does the IMF in return for his help in tough conditions. "Better to take the EU towards the damage to their image and allows for intervention of the IMF, as they continue somewhat opaque in front of him and threatens the cohesion of the Union," said IW researcher Jürgen Matthes, lead author of the study, the "world".
Against an internal rescue talks according to the authors that the EU lacked hardness and sanctions to exert severe pressure on the debt states. In addition, the EU would have in such a case also deeply interfere in the sovereignty of a state. The same is true for the IMF, but in the EU solution is a danger that protests could be addressed quickly in crisis countries against a rigorous approach to other member states, the authors write.
Especially for Germany, the danger exists of being made the scapegoat, because it had always been a champion of fiscal discipline. The gap between North and South of the EMU is likely to intensify further and may in the end jeopardize the entire settlement process, warn the authors.
"It is better, the IMF puts the external debt countries in the curb, when arguing that the euro countries themselves and it comes to political tensions," said Matthes. "The IMF is used to taking on the role of scapegoat." In addition, he has the necessary experience. Matthes calls to establish a possible intervention of the IMF formally in European law.
This would have a positive side effect: "The mere threat of intervention by the IMF to strengthen the Stability and Growth Pact," said Matthes. The build-that the IMF could be determined over large parts of the budget, create incentives for euro countries, a situation like the current permit does not arise.
The predictions made by scientists for the stricken countries in the euro area are anything but optimistic view of the poor competitiveness of the countries it would barely be able to get rid of the foreign trade of the crisis, they write. "This will prolong the recession and worsen the public debt position."
Adds that Greece as a peripheral country drifting a lot of trade with countries outside the euro zone, had to accept some of which a significant devaluation of its currency. This will strengthen their competitiveness in the short term, because countries can export cheaper, and does not precisely that of the Greeks.
DJG / hab / sh