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The IMF had admitted that austerity prone measures and internal devaluation do not yield expected results in the Troika imposed policy framework. This had created dissonance among Troika partners but no lessons were taken since. Quite the opposite, the EU Troika partners continued demanding structural reforms from EU member states albeit with somewhat relaxed conditionality.

Despite its own admittance to errors, a series of recent IMF policy papers have found evidence that labour market reforms towards ever-increasing flexibility may help reduce unemployment.

In Europe at least, all evidence point to contrary conclusions. Since 2010, imposed austerity measures and internal devaluation have not only increased unemployment but largely exacerbated the economic positions of individual European countries and the European economy as a whole.

A recent ILO publication questions the data and methodology of the recent IMF policy papers and sheds serious doubts over the quality and reliability of the given IMF policy advice. The IMF methodology cannot account for the large-scale and scope of the imposed reforms in Europe, not least in the European periphery.

It is time for European leaders and Troika officials to question the used economic paradigms when handling the current crisis and its unprecedented negative social consequences.     

The ILO publication can be accessed here:

http://www.ilo.org/travail/whatwedo/publications/WCMS_238796/lang--en/index.htm