IMF does not need a European. Why?


The reason for the current European soverign debt crisis is quite simple really-Ten years of naive belief that the Greek debt was as low risk as German debt. Banks were nonchalant about their lending to countries whose underlying economic strength was far from comparable to that of the Germans. Somehow ,throughout this period this practice was encouraged politically too.
The rhetoric ever since the crisis began has been almost entirely about how irresponsible Greece , Spain and Ireland have been. But how does a loan exist without both a lender and a borrower?! All along the penalty of these loans has been borne by the borrower, with the lender walking away scott free.The debt crisis may remain unresolved until the the debt is restructured to have the Lenders bear a portion of the consequences. Have a European at the helm of affairs and you may as well write this option off.
Not just that, post the world war II, Europe and the US shared the spoils by distributing the leading positions among themselves, leaving the IMF to the western world to lead. At that point in time the US and Europe together represented over 60 pc of the world’s economy. Today they represent less than half. When DSK was appointed in 2007, the IMF lent largely to Asia and Latin America. Here it made perfect sense to have a western director.How could an Asian impose stringent conditions on an Asian country. In today’s world, where Europe leads the the annual borrowing from IMF, the exact logic should apply.

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