To ourselves a loan -- from the 'hard' IMF
But the global financier's bailout comes with the strict condition we get our own house in order, writes Anthony Foley
One of the main functions of the International Monetary Fund (IMF) is to assist countries which find it difficult or impossible to borrow money in the international financial markets.
The difficulty arises because potential lenders doubt the country's ability to repay the loans. The IMF helps out by providing temporary loans, which have to be repaid, in lieu of the unavailable market loans. IMF assistance is intended to be temporary. The country being assisted is expected to use the loan period to re-establish its ability to borrow money. Consequently, the IMF insists that the borrowing country should "get its house in order".
In most cases this means that government borrowing should be reduced to the level that restores financial markets confidence.