IMF needs more money... for Greece and other European countries

It sounds as if the IMF is not so confident on their solutions. The IMF says that the Greece Bailout "should very significantly increase the amount of special drawing rights, the head of the Fund's policy-steering committee said on Friday."

What that tells me is the simple law of moral hazard, or you get what you pay for, via Economic Times:
Egyptian finance minister Youssef Boutros-Ghali told Reuters that Greece's problems were not over yet and there were doubts about its ability to implement the reforms demanded by the IMF and European Union in return for a 110 billion euro ($135 billion) aid package.

"If we are going to start including funds made available to Europe, then the IMF is not properly resourced," he said. "We need to increase SDRs very significantly. But we also need to shift the structure of resources from mostly borrowing and some SDRs to mostly SDRs," he continued, adding that members had been talking about a doubling of the SDR allocation.

Two allocations of SDRs last year -- the first in 30 years -- increased the International Monetary Fund's stock of SDRs almost 10-fold to total about SDR 204 billion ($313 billion).

China has suggested emerging economies buy more SDRs in return for increased voting rights. G20 finance ministers and central bank chiefs are meeting in the South Korean port city of Busan to lay the groundwork for G20 leaders' meetings in Toronto on June 26-27 and in Seoul in November.


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