6 Jun 2013
IMF admits it miscalculated impact of Greek austerity
FXstreet.com (Barcelona) - According to the WSJ, the IMF admitted in a “strictly confidential” report that it had made some grave mistakes in designing the rescue process for Greece.
In the report, which is expected to be made public today, the IMF recognizes that it underestimated the amount of damage to the economy which could be caused by the austerity measures it recommended Greece to implement. Nevertheless, the organization affirms that they helped gain time and limit the contagion to other countries. This way it admitted that the bailout was more beneficial for the rest of the Eurozone than to Greece.
Nevertheless, it signalized that the measures were forced to bring the growing Greek debt down to sustainable levels and that the country did not fulfill three out of the four requirements put forward by the IMF, allowing it to take advantage of the aid.
Additionally, the IMF criticized the European Commission's lack of experience in managing the crisis which resulted in only a “slight success” in implementing measures.
In the report, which is expected to be made public today, the IMF recognizes that it underestimated the amount of damage to the economy which could be caused by the austerity measures it recommended Greece to implement. Nevertheless, the organization affirms that they helped gain time and limit the contagion to other countries. This way it admitted that the bailout was more beneficial for the rest of the Eurozone than to Greece.
Nevertheless, it signalized that the measures were forced to bring the growing Greek debt down to sustainable levels and that the country did not fulfill three out of the four requirements put forward by the IMF, allowing it to take advantage of the aid.
Additionally, the IMF criticized the European Commission's lack of experience in managing the crisis which resulted in only a “slight success” in implementing measures.