Hutton on Argentine crisis, IMF

[Chris Burford <cburford@xxxxxxxxxx>]

The areas in which the EU needs to protect [project? - CB] an idea of a
more liberal, multilateralist and just order are legion. Start with
finance. The world needs a genuine supranational financial institution
that monitors economic performance and stands ready to provide hard
currency in times of difficulty; instead it has the IMF, an adjunct of
the US treasury. 

Argentina's economic collapse and default on its debt service obligations
at Christmas 2001 are only the latest example of the IMF being forced
into an absurd posture by its American masters; it should have intervened
earlier and more generously. 

It would have been better for Argentina to have imposed capital controls
and devalued the peso earlier, rather than impose a four-year recession
on itself -but that option lay outside the orthodoxy promoted by
Washington. 

The IMF needs more financial resources and a wholesale recasting of its
economic thinking; the EU, acting as a whole,  needs to provide the
finance and insist that the Fund's approach change. 

It could, in extremis, reconstitute the IMF around the euro as an
alternative world reserve currency; certainly it is this threat that,
above any other,  might make the US take a less illiberal stance.


p365-6

Will Hutton, "The World We're In", Little, Brown, Time Warner
Books, London,
www.TimeWarnerBooks.co.uk