The International Monetary Fund has demolished the intellectual foundations of Europe's debt crisis strategy. Drastic fiscal tightening in a string of interlinked countries does two to three times more damage than assumed, especially if there is no offsetting monetary stimulus. Pushed beyond the therapeutic dose, it is self-defeating. At a certain point it becomes pain for pain's sake. The error has long been obvious in Greece. The EU-IMF Troika originally said the economy would rebound quickly, growing 1.1pc in 2011, and 2.1pc in 2012, and on from there to sunlit uplands. In fact, Greek GDP contracted by 4.5pc in ... (full story)