IMF admits overcharging Greek economy for bailoutCurrent affairs
According to an internal report made public on Wednesday, the International Monetary Fund (IMF) made “notable failures” in its handling of the Greek debt crisis.
In 2010 Greece became the first EU country to need a bailout, to the tune of $144 billion, to stop its debt problem spiralling out of control. Just two years later, however, Greece needed a further bailout despite the implementation of strict austerity measures.
The internal report revealed that Greece only met one out of the four criteria for help and suggests that the IMF flaunted its own rules by making Greek debt look more sustainable than it actually was.
Since the initial bailout, the Greek economy has contracted by 17% and unemployment levels, at a staggering 65% for young people, are currently 10% higher than the European average.
The report acknowledges that the burden of austerity was not shared properly, stating that it should have been spread “across different strata of society in order to build support for the program”. Instead, the structural adjustment imposed under the terms of the IMF have hit the poorest hardest and resulted in widespread protest over a number of years.
Greek officials believe the internal report amounts to an admission that Greece was overcharged for a country that was “beset by massive debts, tax evasion and a large black economy.” One official told the Guardian: “For too long they refused to accept that the programme was simply off-target by hiding behind our failure to implement structural reforms…. now that reforms are being applied they’ve had to accept the bitter truth.”
The report also criticised EU officials and the European Central Bank for their “fragmented” decision making. It is believed that these admissions will lead to a reduction in Greek debt which will no doubt be welcomed with open arms in the beleaguered nation.