UE programmes for financially troubled countries should seek to avoid cutting social safety nets too deeply and limit the shock of spending cuts whenever it is possible, the International Monetary Fund’s (IMF) annual report concluded yesterday.
Strains of deep austerity programmes in countries like Greece have prompted the IMF to take more care over the social impact of fiscal readjustment, however necessary the rescue operations may be.
“Executive directors agreed the IMF could pay more attention to inclusive growth, employment, and other social issues,” the report said.
“The IMF has worked with the International Labour Organization on issues related to employment, as well as social protection floors, and the UN Children’s Fund on fiscal issues and social policy.”
However, the report also stressed the IMF’s more conventional successes, with Ireland held up as an example of a bailed-out country which is performing more strongly.
“Ireland’s programme implementation (now in its second year) continues to be strong. The Irish authorities have advanced wide-ranging reforms to restore the health of the country’s financial system so it can support economic recovery,” the report found.