Accountants, Europeanists and Monetary Guardians: bureaucratic cultures and conflicts in IMF-EU lending programs

Abstract

When the European Commission, the European Central Bank and the International Monetary Fund provided financial assistance to crisis-ridden European countries, they frequently clashed over loan conditions related to financial stability, fiscal policy and structural adjustment. This is puzzling given that the three organizations shared a general understanding of how to resolve the crisis, its causes and the need for austerity and were supervised by the same major stakeholders. We argue that these conflicting approaches to financial assistance are the result of distinct bureaucratic cultures. Drawing on empirical evidence from the loan programs to Ireland and Greece we show that preferences voiced by Troika institutions were consistent across countries and reflected coherent approaches to credit lending. The Fund played the role of an ‘Accountant’, seeking to ensure that ‘the numbers add up’ so that its loans are repaid on schedule. The Commission acted as an ‘Europeanist’, interpreting the compatibility of conditions with European rules and treaties as a way to regain competitiveness. The European Central Bank, as the ‘Monetary Guardian’ of the Troika, focused on securing financial and monetary stability for the Eurozone as a whole.

Keywords:

• IMF
• European Commission
• European Central Bank
• Troika
• bureaucratic culture
• international organizations

Disclosure statement

No potential conflict of interest was reported by the authors.

Additional information

Funding

This work was supported by the Deutsche Forschungsgemeinschaft (DFG) under Grant LU 867/2-1/2.

Notes on contributors

Susanne Lütz

Susanne Lütz is Professor for International Politics at the FernUniversität in Hagen, Germany. Her research focuses on international economic organizations, Eurozone politics, financial markets and financial market regulation. Website: https://www.fernuni-hagen.de/polis/lg2/team/susanne.luetz.shtml

Sven Hilgers

Sven Hilgers is Research fellow at the FernUniversität in Hagen. As part of the research project ‘Credit Lending as Two-Level Game: Troika-Debtor Negotiations in the Eurozone’, he analyzes the process of negotiation and implementation of financial assistance programs in the Eurozone. His dissertation project investigates the changing nature of the European Central Bank. Website:https://www.fernuni-hagen.de/polis/lg2/team/sven.hilgers.shtml

Sebastian Schneider

Sebastian Schneider is Research fellow at the FernUniversität in Hagen. As part of the research project ‘Credit Lending as Two-Level Game: Troika-Debtor Negotiations in the Eurozone’, he analyzes negotiation and implementation processes of financial assistance programs in the Eurozone. His dissertation project focuses on the implications of national growth models for economic policy making. Website: https://www.fernuni-hagen.de/polis/lg2/team/sebastian.schneider.shtml