It is a fair guess that the European Central Bank is seriously alarmed by an apparent u-turn in Berlin on International Monetary Fund help for Greece. As the FT is reporting, an IMF bail-out is now not being ruled out, if only because German law and public opinion might prevent a European solution.

An IMF rescue would amount to a big rebuff for the ECB, which has repeatedly warned against any involvement beyond technical assistance. Its objections are partly about prestige: the fund’s involvement would suggest the eurozone was incapable of resolving its own problems. But the Frankfurt-based central bank has other, practical objections. An IMF bail out would involving surrendering control over the crisis, which would reduce the European Union’s influence over events in Greece. There is also the question of whether the IMF would be able to provide sufficient funding to solve Greece’s problems. If it had to ask eurozone countries for additional help, we would be back at square one. Read more