Hampson: Can Lagarde and the IMF save the Euro?

By: /
4 July, 2011
By: Fen Osler Hampson
Director of the Global Security program and Distinguished Fellow at CIGI and Chancellor's Professor at Carleton University

It is not up to Mme. Lagarde and the IMF to save Europe. Europe has to save itself by addressing two critical issues: (1)sovereign debt in the Mediterranean countries (Greece, Italy, Spain and Portugal), which is the result of a bloated welfare state, excessive regulation, tax evasion, and chronic government deficits; and (2) the European Union’s own internal structural imbalances caused by Germany’s export driven model of growth which depends on unsustainable import demand by its European partners. German consumers will have to spend more. The Mediterranean countries will have spend less and become competitive. Lagarde will have to tread carefully and not appear to play favorites, especially when it comes to French creditors who are biggest holders of Greek (junk) bonds.

Before you click away, we’d like to ask you for a favour … 


Journalism in Canada has suffered a devastating decline over the last two decades. Dozens of newspapers and outlets have shuttered. Remaining newsrooms are smaller. Nowhere is this erosion more acute than in the coverage of foreign policy and international news. It’s expensive, and Canadians, oceans away from most international upheavals, pay the outside world comparatively little attention.

At Open Canada, we believe this must change. If anything, the pandemic has taught us we can’t afford to ignore the changing world. What’s more, we believe, most Canadians don’t want to. Many of us, after all, come from somewhere else and have connections that reach around the world.

Our mission is to build a conversation that involves everyone — not just politicians, academics and policy makers. We need your help to do so. Your support helps us find stories and pay writers to tell them. It helps us grow that conversation. It helps us encourage more Canadians to play an active role in shaping our country’s place in the world.

Become a Supporter