IMF's hindsight says it was right to advocate QE in the eurozone

An important International Monetary Fund paper looks at how the eurozone should have responded to the problems that affected five of its members

Blanket austerity across the crisis-hit countries of the eurozone was self-defeating. Germany's analysis of what needed to be done was wrong. The European Central Bank (ECB) was slow to come up with a stimulus package designed to offset the demand-sapping impact of wage cuts.

Those were the main messages of an important International Monetary Fund (IMF) intervention into the debate about how the eurozone should have responded to the problems that affected five of its members - Greece, Ireland, Portugal, Spain and Italy. This quintet accounts for 30% of eurozone output.

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