In This Review

Laid Low: Inside the Crisis That Overwhelmed Europe and the IMF
Laid Low: Inside the Crisis That Overwhelmed Europe and the IMF
By Paul Blustein
504 pp, Centre for International Governance Innovation, 2016

Countless articles and books have analyzed the euro crisis, but until now, a serious treatment of the International Monetary Fund’s role in the crisis has been missing. Media reports often portray the IMF as filled with neoliberal ideologues who enthusiastically helped EU institutions and leaders impose harsh austerity policies and debt-repayment terms on southern European countries. In this authoritative and detailed account, Blustein marshals impressive research to rebut this view. He argues that the fund is home to sound technocrats who act independently and that, in addressing the euro crisis, IMF economists have proved more farsighted and able to learn from mistakes than national governments and have consistently advocated more balanced, less austere policies for Cyprus, Greece, Ireland, and Portugal, including debt rescheduling and the imposition of higher losses on foreign bondholders. Unfortunately, those proposals have been consistently overruled by European governments (which are overrepresented on the IMF’s board), sometimes rejected by the U.S. Treasury Department, and even shot down on occasion by southern European politicians who have sought to avoid short-term adjustment costs.