IMF admits mistakes made in Greece bailout

Fund says it lowered bar for Greece, which could reignite concerns about the lender’s impartiality – Published on AlJazeera, June 6, 2013.

… In a report released on Wednesday that looked back at the bailout, the Fund for the first time said it lowered its bar for Greece, which could reignite concerns about the lender’s impartiality.

Notable failures:   

  • The IMF said its support for Greece in 2010 was necessary to prevent the nation’s problems from spilling over into the rest of the euro zone and the global economy.
  • “There was, however, a tension between the need to support Greece and the concern that debt was not sustainable with high probability,” according to the IMF’s evaluation.
  • “In response, the exceptional access criterion was amended to lower the bar for debt sustainability in systemic cases.”
  • After the Greek program was approved, the IMF and the other bailout lenders – the European Commission and the European Central Bank – required Greece to immediately cut some of its debt and implement structural reforms.
  • There were “notable failures” in the results, the IMF said.
  • Greece remained in the euro zone and cut some of its debt, but failed to restore market confidence. The economy plunged into one of the worst recessions to ever hit a country in peacetime, with output falling 22 percent from 2008 to 2012.
  • Greece’s economy is likely to shrink for the sixth consecutive year in 2013.
  • The evaluation said the IMF’s assumptions for the Greek economy can “be criticised for being too optimistic.”

Adequate data: … //

… (full text).


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