Although Mohamed El-Erian had long advocated for aid to troubled Europe (with an obvious interest in mind), he wants strong strings attached to any lending, especially when it comes to the International Monetary Fund.
“At this weekend’s G20 meeting, European countries are likely to press for an increase in the International Monetary Fund’s resources as a means to bolster the firewalls against the eurozone debt crisis. The other G20 members must resist such pressure until Europe starts showing more signs that it’s getting its act together,” he writes Friday in the Financial Times.
The organization that consists of with 187 member countries is already overexposed to the eurozone countries that are in crisis, he argues. Greece, Ireland and Portugal combined account for almost 60% of outstanding loans even before the fund’s participation in the latest bailout for Greece announced earlier in the week.