The Troika--past and future? A view from Washington

The Troika of the European Commission, European Central Bank, and International Monetary Fund, has “bailed out” troubled euro-area members—Greece, Ireland, Portugal, and Cyprus. This ad hoc arrangement announced in 2010 by the Eurogroup attempted to resolve a defect in the euro-area economic architecture—the no bail out provisions. The Treaty for the European Stability Mechanism states that the EC in liaison with the ECB and whenever possible (emphasis added) the IMF shall set and monitor compliance with policy conditionality. Currently, the IMF and the Euro-group do not agree on official debt forgiveness for Greece. What lies ahead for the Troika collectively and individually? Has this arrangement work effectively for Europe? For the rest of the world? Russell Kincaid, a PEFM associate and former senior IMF official, will provide his Washington-based perspectives.