1 - Conditionality and Country Ownership of the Programs

IMF/Troika lending in support of adjustment programs to Portugal, Ireland and Greece are conditional on the countries undertaking certain agreed policy measures, in the case set in the Memorandum of Understanding (“MoU”) that sets the specifics of the economic policy conditionality. The MoU specify the set of conditions that needs to be implemented by the borrower country (this can be viewed as complex loan covenants, written into the loan agreement), which provide the safeguards that the country will be able to rectify its macroeconomic and structural imbalances and will be in a position to service and repay the loans.