Building the euro area's debt crisis management capacity with the IMF

Since the financial crisis hit the EU in 2007/8, the governance structures of the euro area have undergone significant changes, most of them incremental. There is, however, one substantial innovation: the euro area's building of its capacity to deal with liquidity crises in member states. This article seeks to explain why the governments, which initially seemed to converge on a euro-area-only approach, decided to shape their crisis management structures around an external actor, the International Monetary Fund. It argues that the concept of learning under severe time constraints and external pressure helps to understand the sudden decisions taken on crisis management and governance reform which embed the IMF in the euro area. The analysis identifies learning in three areas crucial for the design of the crisis management set-up: in the field of practical lending and programme implementation, in the understanding of the nature of the crisis and in the evolving acknowledgement of the incompleteness of the euro area's governance set-up.