IMF: More Austerity Needed

The New York Times reports:

The International Monetary Fund sent a simple message Monday to the Greek people as they struggle to cope with the austerity measures being imposed on them in exchange for a bailout: Prepare for more of the same.

“Consolidation will have to continue, ” the I.M.F. said of countries like Greece, Portugal and Ireland that are struggling to close their gaping budget shortfalls. “Continuing fiscal consolidation broadly as planned will support confidence.”

The comments, made in a report after a regular I.M.F. staff mission to the euro zone, come at a sensitive time. Greeks, in particular, are growing increasingly angry about the austerity measures their government has put in place in return for a €110 billion bailout it received a year ago from the fund and European Union countries.

In its report, the I.M.F. also took a broader look at the euro zone and its troubles. It said that if the monetary union is to function, its 17 member states would have to either move toward political union or implement rules that result in tighter cooperation of national budget policies.