Today’s problems cannot, and should not, be solved just by relying on financing from the IMF, WB and EU. Instead we need a long overdue adjustment, with fiscal and structural reforms, including pension, healthcare and education reform for which IMF and WB should play a key role.
“Premature welfare states” as Janos Kornai would call it, based on now scarce and expensive foreign funding, nose-diving FDIs and reduced budgetary incomes, are going to face an abrupt end all over the region. Second, banks that are majority owners of the CEE’s banking sector are hesitating to take the support of their respective governments as well as the IFIs.