- Macroeconomic policy advice and the Article IV consultations: Comparative Overview of European Union Member Statespdf - 1.0 MB
This paper examines 67 IMF Article IV consultations in 27 EU member states between 2008 and 2011, and shows that there is an overwhelming emphasis on fiscal consolidation, reduction of social expenditures, and measures that weaken the bargaining power and income of labour, and make it difficult to promote growth and employment. These findings are very similar to that brought out earlier for 50 low and middle-income countries. The review of Article IV agreements supports the view that policy mistakes by the European authorities, including IMFs priority of fiscal consolidation, have prolonged and deepened the crisis in Europe and contributed to a reform agenda that worsens the impact of the crisis on vulnerable parts of the population. The paper suggests that IMF might wish to engage in Independent Evaluation Office review of its policy advice in Europe. The paper finally notes that there have been some important changes in 2012 and 2013, wherein IMF is engaging seriously with some of the deficiencies in Article IVs.