Jeremy Warner: The IMF is no longer fit for purpose and the current crises show us just why
F the International Monetary Fund did not exist, it would surely have to be invented. Its medicine is often harsh and frequently criticised, but as lender of last resort to countries that temporarily find themselves shut out of financial markets, its purpose is noble and necessary.
In no other field has international co-operation worked as successfully in addressing global problems as it has through the offices of the IMF. The world would undoubtedly be a more chaotic place without it. Just lately, however, its credibility has been endangered as rarely before. Something has gone very badly wrong, and the international consensus on which the organisation is based is fracturing.
The squalid, self-administered nemesis of Dominique Strauss-Kahn, the IMF’s former managing director, plainly hasn’t helped, but in the end that will be no more than a passing blemish that will likely quite soon be forgotten. No – today’s problems run much deeper than sexual scandal. They are to do with the organisation’s slavish support for the euro, a misjudgment that seems destined to test international faith in the IMF to breaking point.