Having involved massive and conditional intervention promises from the IMF, the EU (eurozone) member states have reason put in a new gear with regard to reform at both EU and national level.
According to the IMF, immediate action is needed to:
• Establish fiscal sustainability, with the pace of consolidation differentiated to take into account financial market pressures and the state of the recovery.
• Spur growth, including crucially by implementing a set of priority, country-specific structural reforms throughout the euro area.
• Accelerate the restructuring of the financial system.
• Strengthen economic governance of EMU. As recognized by the Commission and the President’s task force, the focus should be on enforcing budgetary discipline, helped by fundamental legislative reform, and on addressing macroeconomic imbalances.
• Complete the EU’s financial stability architecture by extending welcome progress in establishing more harmonized regulation and supervision of the EU financial system to the area of crisis management and resolution.
The recommendations are then treated in more detail, with equal candour.
We have found a few blog entries and news items worth reading.
Public Affairs 2.0: Tough home truths in IMF report (8 June 2010) refers to the forthright tone of the IMF, to the increases determination to cut government spending, but also to the divergent views on the needed procedures and sanctions.
FT Brussels blog, Tony Barber: Reforms to EU’s stability pact fall short of what’s required (8 June 2010) notes that the finance ministers have gone about as far as they can under the Lisbon Treaty, but more decisive measures will be needed.
BBC, Gavin Hewitt: Tory budget clash in Europe (8 June 2010) reiterates that the UK government will not show its budget to the European Union in advance. [A wonderful red herring for home consumption, in my humble opinion.]
If the European Union (eurozone) is unable to lead itself, it will be led by the IMF, should its dithering lead to severe problems.