IMF admits mistakes over Greece bailout

Headquarters of the International Monetary Fund in Washington, DC, United States (file photo)

The International Monetary Fund (IMF) has admitted that it made serious mistakes in the handling of the sovereign debt crisis in Greece.

In an internal report published on Wednesday, the IMF said there were “notable failures” in preparing the first Greek rescue that forced a second, larger bailout, AFP reported.

The Washington-based organization said it underestimated the damage that fiscal austerity would do to the Greek economy in its earliest rescue of the nation in 2010.

Greece was granted a 110-billion-euro (145-billion-dollar) bailout by the so-called troika of IMF, European Commission (EC) and the European Central Bank (ECB) in May 2010.

Another 130-billion-euro (170-billion-dollar) rescue package was approved in February 2012.

The document said that the troika partners had coordination problems and differing levels of expertise and goals.

“Given the danger of contagion, the report judges the program to have been a necessity, even though the Fund had misgivings about debt sustainability,” it said.

“However, there were also notable failures. Market confidence was not restored, the banking system lost 30 percent of its deposits, and the economy encountered a much deeper-than-expected recession with exceptionally high unemployment,” it stated.

Greece has been at the epicenter of the eurozone debt crisis and is experiencing its sixth year of recession, while harsh austerity measures have left tens of thousands of people without jobs.

The eurozone country’s unemployment rate is 27 percent and economic activity remains well below its levels of half a decade ago.


This article originally appeared on: Press TV