The limitations of IMF involvement

Greece has finally exited its bailout on Monday, after eight long years under EU-IMF supervision. Rather than being a success, however, its experience clearly demonstrates the limits of the International Monetary Fund's involvement in Europe's affairs.

In a narrow sense, Greece's three bailouts achieved their objective, restoring a degree of investor confidence and access to capital markets that was lost in 2009. This was helped by a long-awaited package of debt relief measures from eurozone finance ministers that was also more generous than expected.

But the country's overall experience under eurozone and IMF creditors has been negative. The economy has shrunk by roughly 25 percent and its fundamentals remain extremely fragile: public debt has ballooned to just below 180 percent of GDP; unemployment remains stubbornly high; and the banking system is saddled with non...