Government and Institutions

The IMF and EU still have not woken up to the sovereign debt crisis


Press Release

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Markets and Morality

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Prof Philip Booth comments on the proposed solutions to the crisis

Commenting on the latest rumoured solutions being drawn up to deal with the debt crisis in the eurozone, Prof Philip Booth, Editorial Director at the Institute of Economic Affairs, said:

“The IMF and the EU still has not woken up to the realities of the sovereign debt situation. Simply developing new means for pan-European institutions to borrow more money or parcelling up the debts into packages that are ultimately passed round to other countries or to the ECB is not a solution.

“It is to be welcomed that the EU and the IMF have eventually understood the realities of the Greek situation, but they are a long way from appreciating that the sovereign debt crisis more generally cannot be solved by printing more money or inventing clever financial instruments in ever-more opaque institutions. Ultimately, investors will have to bear real losses because countries have borrowed money that they cannot repay. The IMF and the EU should be considering how to manage this problem in an orderly fashion.”

Notes to Editors

To arrange an interview with Prof Philip Booth, IEA Editorial Director, please contact Stephanie Lis, Communications Officer, 020 7799 8900, [email protected].

The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems.

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