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Let Europe pay for its policy failures

And so the circus moves on. On Thursday the eurozone authorities, for want of a better term, will be meeting in Brussels for the thousandth iteration of their response to the Greek crisis.

The run-up to the summit, which was supposed to design a second and much larger bail-out for Greece, has been sadly typical of Europe’s shambolic and convoluted policy process. The European Central Bank has continued a high-volume but confused row with the eurozone finance ministers about writing down Greek sovereign debt and what does or does not constitute a default.

Watching, with a mixture of resignation and despair, is the institution that parachuted on to the battlefield at the beginning of the bail-out in May 2010, the International Monetary Fund. Anyone who still believes that the IMF is an organisation of sinister omnipotence should take a look at its current situation – and start to think, as some in Washington are, about how the IMF can disengage from a situation where the risk to its reputation is beginning to outweigh the benefit from its presence.

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