Mitch Joel WARNING... LONG RANT! It takes a lot for me to both get angry and publish about it. Canada’s…
The IMF 2012-2015
The Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG) each year bring together central bankers, ministers of finance and development, private sector executives, and academics to discuss issues of global concern, including the world economic outlook, poverty eradication, economic development, and aid effectiveness. Also featured are seminars, regional briefings, press conferences, and many other events focused on the global economy, international development, and the world’s financial system. This year’s Annual Meetings events will take place in Lima, Peru.
Wrangling over IMF succession and US capital still hangs in air
Hopes that this year’s annual meetings would see resolution of the issue of emerging markets’ voting rights and nationality of the next managing director were dashed in Lima
As the IMF annual meetings draw to a close, two intriguing questions remain unanswered. Will IMF managing director Christine Lagarde have her term of office extended when it expires in July, and who will succeed her when she does eventually step down?
Lagarde has said she is “willing” to serve a second five year term, but that the matter is not in her hands. She is “popular with constituents but faces a challenge from the US to shift away from a Europe-dominated IMF,” said a source close to the Fund.
First deputy managing director David Lipton, an American, has insisted that the next IMF head will be a non-European — though he also said the selection process would be “strictly merit-based”. This applies to “after” Lagarde’s term ends, an IMF official said.
But while Lagarde has strong support from some advanced and emerging economies, her continuance for five more years is not assured, said a former IMF deputy managing director. He suggested a possible “deal” where-by Europe would renounce its right to nominate the head of the IMF, while the US did the same for the World Bank.
Lagarde, meanwhile, signalled in Lima her unhappiness with the US Congress’s continued failure to ratify a 2010 agreement that would greatly boost the IMF’s permanent financial resources, or quotas, and give more say to key emerging economies.
Asked whether she could continue running the IMF with this uncertainty hanging over her, Lagarde said at a briefing in Lima that it “does not impede my ability to manage the IMF, but it is an issue for the IMF’s credibility”.
Some have suggested a deal whereby the US would stump up cash in return for securing leadership of the IMF. “The IMF should be a quota-based institution, and [bilateral] loan resources secured when I took over in 2012 are no substitute,” Lagarde said.
The next milepost is the G20 Leaders’ Summit in Turkey in November. The hope is that by then progress will be made in getting legislation through Congress.
“The IMF has moved with the times and that includes shifting more of its voting power to the emerging world,” [Harvard economics professor Carmen] Reinhart said.
World’s financial guardians near funding crisis point
The International Monetary Fund is faced with the need to be able to react quickly and robustly if emerging markets collapse under the combined weight of slow growth and rising debts, or simply run out of cash.
Having focused virtually wholesale on struggling eurozone and emerging Europe since the 2008/09 financial crisis, questions now loom over which other emerging markets, whether in Latin America, Africa, or Asia, may need propping up.
The IMF’s capacity to meet any extra demand on its resources arising from the mounting problems in emerging markets is strong, officials say. “In fact, it’s never been stronger,” one told Emerging Markets.
IMF seminar: Conversation on Climate Change
Responding to the Challenges of Climate Change
Climate finance will also be on the table at the Paris conference. Advanced countries have pledged to mobilize—from public and private sources—$100 billion a year from 2020 onwards for climate mitigation and adaption projects in developing countries. Significant funds for climate finance are already being channeled through lending by multilateral development banks and public donations are being made through the Green Climate Fund, but substantial scaling up will be required if the $100 billion target is to be met.
LEANING IN: Former French Finance Minister Christine Lagarde, who now heads the International Monetary Fund, and Dominique Strauss-Kahn, who ran the fund until 2011. Pictured here in Paris in 2010, they both led the fund through uncharted waters. REUTERS/Benoit Tessier
How the IMF’s misadventure in Greece is changing the fund
The International Monetary Fund felt it had to help Athens – but documents show it knew all along its plans were flawed. The compromises it made still dog the world’s lender of last resort.
WASHINGTON/ATHENS – Many of the top brass of the International Monetary Fund always had concerns about the plans to bail out Greece. That much was clear as far back as May 9, 2010, when the IMF’s 24 directors gathered in Washington to sign off on the fund’s participation in the first, 110-billion-euro ($125 billion) rescue alongside European institutions.
A Reuters examination of previously unreported IMF board minutes shows that a near majority of directors round the board table that day thought the Greek program would not work.
The fund’s powerful Managing Director, Dominique Strauss-Kahn, and a handful of his advisers, feared Greece posed a threat to the wider euro zone financial system. They had already decided to plunge into the crisis. The doubters were given a blunt retort, according to the minutes.
“Let me be clear on a couple of things,” said then Deputy Managing Director John Lipsky, who chaired the board meeting. “There is no Plan B. There is Plan A, and a determination to make Plan A succeed. And this is it.”
Five years later, after the biggest bailout in the fund’s history, Greece failed to make a $1.7 billion payment as required at the end of June – the first advanced economy ever to default on the IMF. Worse, after having received more than 240 billion euros in international aid, Greece’s economy is still in tatters. Europe agreed a further bailout of 86 billion euros this month.
Fresh interviews with more than 20 senior officials, as well as an extensive review of IMF board records, illuminate the turmoil and divisions within the fund, then and now. They show Strauss-Kahn and his top advisers set the fund, which by tradition has always been led by a European, on a course known to be flawed, and that non-European shareholders doubted would work.
To drive through the Greek bailout, the fund bent its own rules. It lifted an IMF ban on the fund lending money to countries – like Greece – that were unable to pay their debts. It also allowed European politicians to dictate initial terms in the Greek rescue, ruling out a debt restructuring that could have given Greece a fresh start. And it shaped economic forecasts to fit political ends.
IMF and USAID strike deal over sustainable development goals
(Public Finance International) The International Monetary Fund and the US Agency for International Development have reached an agreement to better coordinate their work on the newly agreed sustainable development goals.
The agreement, signed on August 21, will see the two agencies work together on capacity development, including through the IMF’s technical assistance centres that help countries develop policies to boost growth.
IMF deputy managing director Carla Grasso said the deal had been reached at a very important time following the Financing for Development conference in Addis Ababa and ahead of the next month’s Sustainable Development Goals conference in New York and the climate change conference in Paris starting in November.
Under the agreement, USAID will continue to support the development of the IMF’s Middle East Regional Technical Assistance Centres, one of the fund’s nine regional centres. These help over 100 member countries strengthen their capacity to design and implement policies that promote growth and reduce poverty.
The IMF is caught in a geopolitical tug-of-war between Germany and the US
(Quartz) The International Monetary Fund faces a stern test of its independence that could have repercussions far beyond the fate of the Greek economy, by far its biggest headache of the moment.
Euro-zone finance ministers are expected to approve a new rescue deal for Greece after months of contentious negotiations on debt relief and austerity ended in the capitulation of Greece’s left-wing government to its creditors. Those creditors include other euro zone governments, the European Central Bank, and the IMF.
Nonetheless, the IMF has made clear that Greece’s debt load, expected to balloon to more than twice its annual economic output in 2016, is not sustainable without some form of relief—that is, a meaningful reduction in what Athens owes. The IMF’s rules prohibit lending to countries with so much debt that they are not able to pay the fund back. That means even though the IMF endorses the reforms required by the new Greek bailout agreement, it likely won’t sign on to participate in this new loan program unless there is enough debt relief to make repayment a reasonable possibility
Opinion: Varoufakis vindicated while Lagarde emerges as a loser
Something is going badly wrong in relations between Christine Lagarde, the International Monetary Fund’s managing director, and the staff of the institution. Three times this month, in politically fraught negotiations over a Greek debt package, the IMF staff has disavowed its management over providing more loans to Greece as part of the third bailout deal of €82 billion to €86 billion that euro leaders stated they sealed on July 13. … Although Lagarde has some support for her incumbency, she is coming under criticism from inside and outside the organization for displaying style rather than substance.
IMF’s Lagarde put under investigation in French fraud case
(Reuters) – IMF chief Christine Lagarde has been put under formal investigation by French magistrates for alleged negligence in a political fraud affair dating from 2008 when she was finance minister.
Lagarde was questioned by magistrates in Paris this week for a fourth time under her existing status as a witness in the long-running saga over allegations that tycoon Bernard Tapie won a large arbitration payout due to his political connections.
“After three years of procedure, the sole surviving allegation is that through inadvertence or inattention I may have failed to intervene to block the arbitration that brought to an end the longstanding Tapie litigation,” she said in a statement on Wednesday. “I have instructed my lawyer to appeal this decision, which is without merit.”
[Useful background from our friend Nick Rost van Tonningen:
Tapie once was France’s business ‘Wunderkind”. Born into a family of modest means, while still in his 20’s he started buying companies in trouble, sorting them out & divesting them at a profit. Along the way he amassed a fortune, incl. a rich man’s favorite play thing, a sports club, in his case the Olympique de Marseille championship football club, and briefly was a (Socialist) government minister. But, like a ‘nova’ star, his downfall was as spectacular as his rise had been; for in the mid-90’s, when he was in his early 50’s, he was charged, among others, with match fixing, tax fraud & complicity in corruption, went bankrupt, & briefly ‘did time’. During this period he sold his nearly 80% stake in Adidas to the French bank, Crédit Lyonnais which later sold it at a big fat profit. In the 2007 election, he suddenly emerged, despite his previous Socialist affiliation, as a supporter of Sarkozy, sued the by then defunct Crédit Lyonnais for having defrauded him in the Adidas sale a decade earlier &, in due course, won a 430MM Euro arbitration award, which it has led to the current investigation. The question preoccupying the magistrates is how much, & when Lagarde knew what & whether as Finance Minister she she signed off on some documents with a signature she has maintained all along is a forgery. Nick’s Gleanings #577)]
Stop blaming the IMF for everything
(WaPost) International Monetary Fund (IMF) managing director Christine Lagarde has withdrawn as Smith College’s commencement speaker after student protests.This outcry wasn’t over Lagarde herself, but rather the institution she leads. An online petition said that the IMF “contributes to many of the systems we are taught to fight against,” so they didn’t want Lagarde to speak to them lest they give their tacit support to it.
This protest isn’t just — trigger warning — political correctness taken to the extreme. It’s also out-of-date. The IMF has actually become the “good guys” since the financial crisis hit.
The IMF used to have a pretty well-deserved reputation for destroying economies. Okay, that isn’t really fair. Economies were already destroyed by the time they called the IMF for help. But the global lender would set tough conditions on its aid that increased short-term pain that was hardly in short supply to begin with. It would force countries to cut their public sectors and social spending, while liberalizing capital flows and privatizing state-owned companies that were often cozily controlled by political insiders. If, that is, countries wanted to get the next tranche of their loans to avoid default.
G20 gives U.S. year-end deadline for IMF reforms
(Reuters) – Finance chiefs from around the globe on Friday gave the United States until year-end to ratify long-delayed reforms to the International Monetary Fund and threatened to move forward without it if it fails to do so.
The inability to proceed with giving emerging markets a more powerful voice at the IMF and shoring up the lender’s resources appeared the most contentious issue for officials from the Group of 20 leading economies and the representatives for all IMF member nations who met with them.
In a final communiqué, G20 finance ministers and central bankers said they were “deeply disappointed” with the delay.
The reforms would double the Fund’s resources and hand more IMF voting power to countries like the so-called BRICS – Brazil, Russia, India, China and South Africa.
The IMF released its World Economic Outlook on Tuesday, noting that global recovery is becoming broader, but the changing external environment poses new challenges to emerging market and developing economies. The strengthening of the recovery from the Great Recession in the advanced economies is a welcome development, according to IMF staff. But the latest WEO also emphasizes that growth remains subpar and uneven across the globe.
“The recovery which was starting to take hold in October is becoming not only stronger, but also broader,” said IMF Chief Economist Olivier Blanchard. “Although we are far short of a full recovery, the normalization of monetary policy—both conventional and unconventional—is now on the agenda.”
Blanchard cautioned, however, that while acute risks have decreased, risks have not disappeared.
Brett House: The IMF is turning 70. Here’s why you should celebrate
(Quartz) As it nears the 70th anniversary of its conception at the Bretton Woods Conference in 1944, the International Monetary Fund (IMF)—whose biannual meeting starts today—is arguably the public institution most essential to the future of the global economy. Yet plenty of people are still convinced it is either evil or useless.
Perhaps more than any other body, the IMF has acted on the dictum that you should never let a good crisis go to waste; and since the failure of Lehman Brothers in 2008 and the onset of the Great Recession, the IMF has had a very good crisis indeed. From resolving Greece’s existential threat to the euro zone, to a recently mooted $18 billion loan to support Ukraine, the Fund has re-established itself as the world’s key financial firefighter.
During the crisis, the IMF has approved 154 new loans, paid out $182 billion to countries in need, and provided technical assistance to 90% of its 188 member countries. It’s helped countries avoid the spread of beggar-thy-neighbor trade restrictions. It also pushed the G20 to agree in 2009 to commit $1 trillion to fight the recession followed up by an additional $2 trillion in January this year.
It’s also worth remembering that a few years ago, things were looking a lot less rosy.
IMF chief Christine Lagarde on removing hurdles from a strong global economy
The International Monetary Fund’s Managing Director Christine Lagarde speaks to Judy Woodruff about the importance of financial and structural reforms in Ukraine, measuring the effects of sanctions on Russia, combating a sluggish global economy and encouraging women to access the job market. Plus IMF director Lagarde: Congress made mistake by not voting for IMF changes as part of Ukraine Aid Providing financial stability to countries around the world is a powerful tool for the U.S. in international relations, says IMF head Christine Lagarde. The U.S. Congress missed an opportunity to build a more stable, more solid institution by limiting IMF reforms, when it passed a bill supplying $1 billion in aid for Ukraine last week.
U.S. Ukraine Aid Frustrated by IMF Reform Debate
The reform is part of a larger movement to make the governance of major international institutions more representative by providing a stronger voice for middle-income countries, in particular.
(IPS) – Despite pressure from the Barack Obama administration, Ukraine’s new prime minister, and a veritable who’s who in Washington’s foreign policy and financial establishment, Congress adjourned Friday for a 10-day recess without approving emergency assistance for an increasingly beleaguered and economically bereft Ukraine.
The failure to pass a billion-dollar package of loan guarantees – just two days before a Moscow-backed plebiscite in Crimea is expected to endorse secession from Ukraine and integration with Russia – resulted largely from Republican opposition to reforming the International Monetary Fund (IMF), the Washington-based multilateral agency that is expected to take the lead in any rescue of Kiev’s debt-ridden economy. While the Democrat-led Senate Foreign Relations Committee combined both the aid and the IMF reform package, Republican leaders in the House, which passed the aid package as a stand-alone measure last week, said they opposed adding the IMF provisions, which, among other measures, would permit the Fund to lend more money to needy clients, including Ukraine.
The latest group opposing inequality: The IMF? (subscribers only)
(Globe & Mail) Something must be done about rising income inequality, says the International Monetary Fund, and the solution is redistributive taxation. You read that right – the IMF in Washington, the same people who dole out free-market medicine and put fiscal hairshirts on insolvent governments. Their latest idea, announced yesterday by the Fund’s deputy managing director, David Lipton, sits oddly with the Fund’s reputation as global capitalism’s establishment club. But if the IMF is beginning to focus on statistics about wealth disparity rather than good old GDP, it is because the figures look alarming and, more importantly, because governments – the Fund’s members – now fear political conflict and social unrest.
IMF: Redistribution, not austerity, is the way to end economic inequality
The International Monetary Fund is urging that countries adopt a “progressive” redistribution approach to counter economic inequality, says an IMF report. “The interest in redistribution, as reflected in public surveys and our discussions with our members, shows that interest is higher than in the past,” says David Lipton, IMF’s first deputy managing director. “Our members want to explore with us how they can pursue distributive policies in an efficient manner.” Inter Press Service (3/13)
IMF to start negotiations with Ukraine on aid program
(Reuters) – An International Monetary Fund team in Kiev will begin negotiations with Ukrainian authorities about an economic reform program, the IMF’s chief said on Thursday. … In the past, the IMF has asked Kiev to cut its large fiscal deficit, float its exchange rate, and phase out costly energy subsidies. Similar conditions are expected to be attached to any new IMF bailout package. But some analysts have questioned the new government’s ability to carry out unpopular reform measures. Ukraine’s new government is dealing with political turmoil, including the possible annexation of the Crimea region to Russia following a referendum set for Sunday.
U.S. Senate panel approves Ukraine bill with sanctions, IMF reforms
(Reuters) The bill also includes reforms of the International Monetary Fund, which were requested by the Obama administration but left out of a Ukraine loan guarantee package passed last week by the House.
The Obama administration has been pushing Congress for a year to approve a shift of $63 billion from an IMF crisis fund to its general accounts to maintain U.S. influence at the lender and make good on a commitment from 2010.
Some Republicans worry about the IMF’s lending to richer European nations and possible losses on loans by the fund. Before passing the full bill, the committee voted down an amendment that would have removed the IMF provision from the bill.
The Secret History of the Financial Crisis
By Harold James, a senior fellow at the Center for International Governance Innovation
(Project Syndicate) The Fed’s growing international role since 2008 reflects a fundamental shift in global monetary governance. The IMF emerged at a time when countries were routinely victimized by New York bankers’ casual assumptions, such as J.P. Morgan’s assessment in the 1920’s that Germans were “fundamentally a second-rate people.” The IMF was a critical feature of the post-WWII international order, intended to serve as a universal insurance mechanism – not one that could be harnessed to advance contemporary diplomatic interests.
Today, as the Fed documents clearly demonstrate, the IMF has become marginalized – not least because of its ineffective policy process. Indeed, at the outset of the crisis, the IMF, assuming that demand for its resources would remain low permanently, had already begun to downsize.
In 2010, the IMF made a play for resurrection, presenting itself as central to solving the euro crisis – beginning with its role in financing the Greek bailout. But here, too, a secret history has been revealed – one that highlights just how skewed global monetary governance has become.
The IMF (Finally) Admits That Inequality Slows Growth
(The Nation) The most important inequality-related news of the week was the release of a new IMF report that found that lower inequality is correlated with faster growth. This marked an amazing reversal. The IMF made itself notorious over the years through its strong support of anti-equality economic policies such as austerity budgets and radically weakened labor laws—all in the name of economic growth and development.
But this week, the organization finally admitted that such policies aren’t associated with growth, after all. Indeed, according to their study, “redistribution appears generally benign in terms of its impact on growth” (emphasis theirs). Oops!
The IMF is hardly alone in taking this position. Unsurprisingly, conservative economists and pundits continue to insist that high levels of inequality are necessary for economic growth—you don’t want things so equal that those sainted “job creators” go Galt on you, do you? But a growing number of economists are coming to believe the opposite.
Joseph Stiglitz and Paul Krugman, for example, argue that inequality has slowed growth. Late last year, Jared Bernstein wrote this excellent report about the impact of inequality on growth. The report zeroes in on three theories about the relationship between growth and inequality that are particularly promising.
IMF sours on BRICs and doubts eurozone recovery claims
Fund admits emerging markets have exhausted catch-up growth models after being caught off guard by rout triggered by Fed taper talk
(The Telegraph UK) The International Monetary Fund has thrown in the towel on emerging markets. After years of talking up the BRICS club of Brazil, Russia, India, China, and South Africa, it now admits that these countries have either exhausted their catch-up growth models, or run into the time-honoured problems of supply bottlenecks and bad government.
Rising powers slam IMF reform delay
Emerging economies are expected to use the meeting of the International Monetary and Financial Committee to express anger over delay to IMF reform
(Emerging Markets) Emerging market countries angry at the failure to implement long-delayed reforms of the way the IMF is governed could use today’s key meeting to voice their complaints.
Finance ministers are expected to raise their demands for greater voting power and share of top positions – known as the “shares and chairs” issue – at the IMF’s International Monetary and Finance Committee.
They want to secure bigger shareholdings or “quotas” and more seats on the IMF’s Executive Board for emerging economies – and the BRICS countries in particular.
Brett House: Beyond the Communiqués
Why the IMF-World Bank meetings currently underway in Washington are just one way the international community collaborates on the economy
(OpenCanada.org) Five years ago the global economy was on the edge of tipping into a repeat of the 1929’s crash and drawn-out recession of the 1930s. International policy makers came together and took innovative and decisive action. Five years later, the global economy may still be on life support, but it’s still alive. In 2008 when we gathered in Washington, no one thought that was a certainty.
19-21 April Spring Meetings of the World Bank and the IMF.
IMF and World Bank walk an economic tightrope
The annual spring meeting of the International Monetary Fund (IMF) and the World Bank in Washington has a lot on the agenda. Both bodies have also grown more cautious in assessing conventional concepts.
The director of the International Monetary Fund (IMF), Christine Lagarde, is not content with global economic developments. There are different speeds at which individual regions are moving towards recovery. Developing and emerging nations have seen their economies expanding, while the United States has posted only moderate growth. Europe and Japan are lagging behind.
“Such an uneven, three-speed recovery is not healthy,” Lagarde said. “We need a global economy that’s growing at full speed.” Lagarde added growth had to be solid, sustainable and environmentally friendly.
Her vision may sound nice, but present-day realities are different. That’s why Lagarde made many different recommendations. Addressing the rapidly growing developing and emerging countries, she warned against excessive financial operations and urged a strengthening of regulatory bodies.
Changing of Lagarde
How the IMF’s courageous new chief is saving Europe.
(Foreign Policy) Under Lagarde’s refreshingly bold, imaginative, and courageous leadership, the IMF is at last proving to be an effective force in counterbalancing the excessive budget policy orthodoxy of the European Central Bank (ECB) and the European Commission (EC) in the search for ultimate solutions to the European economic crisis. She has delivered a desperately-needed reality check.
By Jennifer Jeffs
(OpenCanada.org) If you haven’t already watched or read Christine Lagarde’s keynote speech from the CIC’s Globalist of the Year gala dinner last week, I encourage you to click here.
In her first speech in Canada since she assumed the role of IMF managing director in July 2011, Mme. Lagarde emphasized the importance of international collaboration in addressing economic weaknesses that, needless to say, have global ramifications. On that point and others, Mme. Lagarde praised Canada, commending Canada’s cooperative spirit, solid regulatory system, and reliable supervisors, particularly Bank of Canada Governor Mark Carney, whom Mme. Lagarde called a “a fantastic governor of [the] central bank,” and thanked Canada for sharing him with the world for his work heading the Financial Stability Board.
Mme. Lagard’s speech contained more than praise and optimism. She reminded us that the theory of emerging economies’ resistance to the downward pull of faltering advanced economies has been disproven. The IMF continues to lower its global growth projections for 2012 and 2013. On the global financial system, Mme. Lagarde stated that “the basic structures that we found problematic before the crisis are still with us,” citing overly complex banking systems, highly concentrated assets, and institutions’ excessive reliance on wholesale funding. Counter-productive vested interests must be combated and national strategies must have global outlooks, reflecting the fact that the global economy is more deeply integrated than ever.
Lagarde: Renewing the Purpose of the IMF
By Bessma Momani and Kevin English
(Open Canada) At the IMF-World Bank Annual Meetings in Tokyo this month, participants from the private and public financial sector gathered to assess the state of the world economy. With the Great Recession still fresh on everyone’s minds and the speed of economic recovery barely making the kind of positive impact that could be felt on Main Street, the mood was sombre and pensive. As the head of the International Monetary Fund, all eyes were on Christine Lagarde to guide the global recovery.
At the core of the Ms. Lagarde’s global recovery plan is the need to foster deeper global policy coordination within what is an increasingly multipolar and heterogeneous economic order. The IMF is needed to synchronize the recovery strategies of key global economic powers, while warning of and preventing any unintended consequences. These are not easy challenges for Lagarde to navigate, but in her words: “A world that is bound together must be a world that works together – a world that… ‘has not been broken up into fragments by narrow domestic walls’.”
G20 leaders draw up growth pledge, IMF gets boost
Late on Monday, IMF managing director Christine Lagarde said member states had promised a total of $456 billion (361 billion euros) for its new crisis fund. The amount is $26 billion more than a target that was set in April.
G20 commit to IMF vote reform by October: draft communique
(Reuters) – The Group of 20 will commit to implement IMF voting reforms “in full” by October to better reflect the rise of emerging countries in the world economy, according to a draft G20 communique.
(BBC via Foreign Policy) IMF has also announced it is doubling its crisis intervention fund to $456 billion, $43 billion of which has been pledged by China. In a meeting of the BRICS countries, all five offered to contribute $10 billion to the IMF in exchange for voting reforms giving them greater influence in the organization.
Emerging Nations Vie for Power at IMF
(Spiegel) The European Union would like to see the International Monetary Fund provide billions in additional funds to help relieve the debt crisis. However, a number of emerging economies are resisting the plans, accusing the West of abusing its power within the organization and creating a “North Atlantic Monetary Fund”. … For the BRICS countries, the IMF’s participation in the second bailout package for Greece and the replenishment of fixed-term credit lines available to the IMF, with which the new aid is to be funded, are welcome occasions for a show of strength. In the long term, their goal is to revise their relative importance within the fund’s decision-making bodies to reflect their increased importance to the global economy. A tough struggle is practically guaranteed for the next few years.