Antonio Borges, Director of the IMF's European Department, addresses the media as he releases a report entitled, "Regional Economic Outlook for Europe: Navigating Stormy Waters" in Brussels, Wednesday, Oct. 5, 2011.Yves Logghe/The Associated Press
The idea that the International Monetary Fund would participate in a sovereign bond-buying program alongside the euro zone's bailout fund was a good idea – except that it wasn't an IMF idea. Antonio Borges, the Fund's European department head, had to retract his stunning statement after belatedly noticing that the IMF had neither the money, nor the legal authority to buy bonds on the market. His good idea lived on for only about six hours.
The euro zone debt crisis hasn't been good for political unity in the monetary union. Governments are naturally divided between those who need help and those who are providing it. Even within Germany, it's sometimes hard to understand who determines the line, as the statements by Chancellor Angela Merkel, her Finance Minister Wolfgang Schaueble, or other cabinet ministers regularly contradict each other.
At least the euro zone has one transnational authority speaking with one voice, the European Central Bank. Well, not quite. What used to be impeccably boring unanimity in the ECB's governing council has become a free forum of strong and often diverging opinions. Every national central banker seems authorized to give his own advice on the bank's policy – and two German representatives who were the fiercest opponents to the bond-buying policy have resigned in protest.
So the IMF seemed to remain the only institution able to speak with one voice. Not any more. Miscommunication is one area where contagion is obvious. Mr. Borges' gaffe will add to the debt crisis's official brouhaha, leaving markets even more puzzled about the never-ending string of blunders by those who are supposed to know what they are doing.