IMF warns EAC on monetary union
The International Monetary Fund (IMF) has asked East African Community countries not to rush their monetary union plan,but take all the steps and learn from the mistakes of Europe and other monetary unions. IMF managing director Christine Lagarde says there is need for the countries to tread carefully even as IMF offers to provide technical assistance for the expected single currency.
Lagarde added that the Monetary Union Protocol signed a month ago by the bloc’s heads of state is “very ambitious” and prone to multiple challenges ahead.
In Europe, for instance, failure to provide European Central Bank with cross-border supervisory powers created loopholes that States like Greece, Spain and Italy exploited to exceed sustainable borrowing levels, plunging the whole union into debt crisis.