If things get bad enough and/or the country is systemically important enough, the IMF will “war game” contagion effects. They will also get as prepared as they can for “the call”, the moment when the authorities of the member country formally ask for assistance in putting together a program. A country asking for a program has a stigma attached to it—especially for a wealthy, developed one. So the IMF is painstakingly scrupulous about “not getting out in front of” a member request. This is what is going on here.
So, up until “the call” the IMF will publically say “we are not in talks with country X about a program”. This may lead to some confusion because many wrongly infer preparations are not being made. But they are. They always are.
The IMF is an extremely professional organization. The most impressive bureaucracy I’ve ever seen (and I’ve seen a lot of them). Trust me; they are putting on the face paint.
With Greece now in a two-week polling blackout (no polls are allowed in the two weeks prior to the June 17 election) all the headlines that matter will probably be Spain-related.
This is the story.