After Latvia and Hungary, Rumania is now the third EU Member to be taken under the wings of the International Monetary Fund. Whilst the heads of state and government demand that the role of the IMF with respect to the future global financial regulation is enhanced, its recipes for tackling the crisis remain as controversial as ever.
Anybody who thought that the obvious breakdown of market radicalism in the wake of the financial crisis would result in a quieter manner of its followers, is currently taught otherwise. Not only do some leading representatives of the present Czech EU Presidency push for more deregulation as a recipe for combating the crisis; the Romanian President Basescu, whose country as a third EU Member State after Hungary and Latvia now too has to turn to the International Monetary Fund for help, also calls for stricter budgetary discipline and for reducing red tape. One should, however, not forget what happened recently in Latvia with respect to the conditions tied to the loans granted by the IMF. The kill-or-cure remedies of the IMF - including the reduction of social security benefits and wages - resulted in violent protests in the Baltic state and in a downfall of the government.

Reduced public spending, higher interest rates, comprehensive privatisations and market openings are elements of a neoliberal economic philosophy, which has entered the IMF under the name of “Washington Consensus”. In the 1980ies and 1990ies, this poisonous mixture turned the Monetary Fund into a real object of hatred in Latin America and Asia apart from having to put up with massive criticism by renowned economists such as the US Nobel Prize winner Joseph Stiglitz. Unsuitable recipes for combating the crisis and the weakening of the Fund resulting from it, as well as an abundance of private capital heralded the start of a phase of lost importance for the IMF.

It is not without a certain irony that just now the European Union, which officially always supported a social market economy as a counter model to the methods promoted by the IMF has to turn to the Monetary Fund to be able to help its own members out of balance of payments difficulties.