But the basic IMF principle of conditionality was not twisted until unrecognizable.

(The new, gentler IMF has sworn off such harsh conditionality for Greece.)

Admittedly, this would require departing from the Fund s traditional lending in exchange for conditionality.

To allay anxiety about government profligacy, the ECB built conditionality into its bond purchase program.

When Bank research showed that conditionality did not work, the Bank under Wolfensohn moved away from it.

Even in Europe, with its long history of cooperation, surveillance and conditionality are outsourced to the IMF.

Would it have been a good idea for the IMF to extend its conditionality in this manner?

Even in Europe, with its long history of cooperation, surveillance and conditionality are outsourced to the IMF.

But aid conditionality and treaty commitments have significantly constrained policymaking in most developing countries, especially the poorest.

The IMF started to do this when it created credit facilities without the Fund s usual (and humiliating) conditionality.

The IMF has recognized that there was excessive conditionality, and that these conditions led to a lack of focus.

The problem is that the IMF has bought into the rhetoric of its critics by agreeing to streamline its conditionality.

Unfortunately, the Fund is not regarded as being impartial, especially by countries that have been seared by its past conditionality.

Indeed, East Asian countries may find it difficult to conduct candid surveillance of one another s policies and enforce firm policy conditionality.

One is institutional conditionality only governments that show serious progress in reducing inefficiency, robbery of public property and corruption, should receive aid.

IMF conditionality for the activation of the majority of their borrowing could make countries reluctant to turn to the CMIM for support.

At the same time, imposing conditionality on this kind of disbursement would enhance legitimacy, as opposed to the current framework, in which beneficiaries seek entitlements.

This was a lesson for the world B debtors and creditors alike B that conditionality is more than mere rhetoric, and bailouts are not unlimited.

Conditionality may not be the right word to describe the relationship, because it implies that certain conditions must be met before the Union bestows benefits.

Given the IMF stigma in Asia, a co financing facility that provides precautionary credit lines without policy conditionality to qualified member countries would be useful.

Despite the ECB s imposition of conditionality on beneficiaries of its potentially unlimited bond purchases, financial markets across Europe and the United States staged a major rally.

The Fund, too, began to reduce conditionality, and eventually it began to question the desirability of capital market liberalization, which previously had been central to its agenda.

This will be sufficient to enable the IMF to come to the aid of specific countries in trouble, but it will not provide a systemic solution without conditionality.

The International Monetary Fund, for its part, has created a new liquidity facility, enabling countries that pre qualify to apply and get funds with little or no conditionality.

Loan guarantees from Germany and or the EU are less desirable than an IMF program, as it is very hard to design and credibly implement conditionality in such guarantees.

The Fund now openly talks about the need to focus on poverty, and it candidly acknowledges that it had imposed too much conditionality when providing financing to poor countries.

Another crucial innovation has been the development of the European Stability Mechanism, which, like the International Monetary Fund, has the capacity to execute vast financial bailouts, subject to conditionality.

Today, owing to the conditionality of its loans, the Bank is losing competitiveness vis à vis the plethora of actors, both public and private, that crowd the development scene.

For others, conditionality will be more tightly focused on core areas, and structural conditions that require hard to time legislative measures will be judged in a less formalistic manner.

As the EBRD acknowledged in February, the SNRIU is now prohibited from taking the lead in conducting safety inspections, which is in breach of the EBRD loan agreement conditionality.

We Europeans must favor stability, create a real spirit of co ownership, and promote political responsibility.In this new framework, the EU should avoid excessive conditionality, especially during the transition period.

But foreign donors must exercise greater oversight and conditionality in their regional aid programs, as well as ensure that their assistance is better coordinated and integrated than in the past.

Since the European Union has no history of imposing conditionality, and ECB financing could be perceived as a form of bailout, a formal IMF program would be the better approach.

When the IMF comes in, it typically applies some degree of conditionality, as would any other lender, to ensure that its loan is eventually repaid, and used for its intended purpose.

After all, if markets truly believed that the ECB would refuse to backstop errant governments, investors would run away from participating countries at the first sign that conditionality was not being met.

And, in the run up to the G 20 summit in London, it thoroughly overhauled its lending policies, de emphasizing traditional conditionality and making it easier for countries to qualify for loans.

A new Flexible Credit Line makes high volume financing available  even before a crisis has struck without any ex post policy conditionality to qualifying countries with strong economic fundamentals and policy frameworks.

The IMF has moved in this direction by creating a Short Term Liquidity Facility through which countries with strong policies can draw from the Fund up to five times their quota without conditionality.

In Europe, monetary intervention has greater potential to help but with a similar risk of making matters worse. To allay anxiety about government profligacy, the ECB built conditionality into its bond purchase program.

The prospect of EU membership is at the heart of EU policy in the western Balkans, where we are starting to show (for example in Bosnia Herzegovina) a dangerous disinclination to apply tough conditionality.

The credibility of its pledge depends as much on what it will do (buy unlimited quantities of government bonds) as on what it will not do (buy them from countries that do not fulfill conditionality).

In the end, South Korea was saved by coordinated forced rollovers of foreign banks lending (why not try that in Greece?), and Indonesia experienced financial meltdown, because the country could not fulfill much of the IMF s conditionality.

The necessity of a banking union is now more generally accepted, and there is a move to augment the European budget with funds that could be deployed with policy or project conditionality, in addition to ESM resources.

But aid conditionality and treaty commitments have significantly constrained policymaking in most developing countries, especially the poorest. In particular, slow growth and revenue losses, owing to economic liberalization programs, have reduced the scope for fiscal policy, with serious consequences for poverty and destitution.

Under the former, the European Commission would impose fiscal and structural conditionality on Greece, while the EU and or ECB would provide financing, which would be absolutely necessary, because announcing even the best conceived reform program would not be sufficient to restore lost policy credibility.