Plans for an EU counterpart to the International Monetary Fund are taking shape as leaders discuss how to improve economic coordination and protect the euro. It has opened a Pandora’s Box of questions regarding its potential design.
I have written an in-depth article in French analyzing this EMF plan for the ‘Institut Hayek‘ in Brussels. My thesis is that an EMF is not likely to be set up soon, thus it is the IMF which is more likely to rescue Greece’s economy. But, if an EMF is still created, independence issues and conflicts between the German and French conceptions of how robust and sustainable a public budget is supposed to look like are likely to appear.