There will be no third Greek bailout until after Angela Merkel is safely reelected later this month. Once that’s in the bag, though, there’s no time to waste, because the IMF has instituted a very sensible rule for dealing with immediate crises. Read more »
The IMF chief, whose words have never and will never rattle markets like those of the Beard, cannot understand why the Fed is unable to deploy information as sagaciously and effectively as her august organization. Read more »
The International Monetary Fund said Thursday that it would continue to finance Greece as long as it is able to complete a review of the cash-strapped country’s finances by the end of July as expected. The statement by the Washington-based multilateral lender came in response to reports that several European central banks were refusing to roll-over loans to Greece, something that could create a shortfall in Greece’s financing. A media report said the IMF had warned European countries that it would cease lending to Greece as early as July if the funding gap wasn’t filled. [WSJ]
Unchastened by recent difficulties, Christine Lagarde & co. see a smaller-than-expected deficit, rising tax revenues and other signs of a terminally-ill economy and insist they know the solution (this time). Read more »
The shadow government will offer a “whoopsie” and a “we’re kinda sorry” tomorrow for botching just about everything, re: bailing out Greece.
In an internal document marked “strictly confidential,” the IMF said it badly underestimated the damage that its prescriptions of austerity would do to Greece’s economy, which has been mired in recession for years.
How did it screw up? Let us count the ways.
It twisted and stretched—and ultimately ignored—its own criteria for qualification. With hindsight, it seems Greece should not have been eligible for assistance. Whoops!
It repeated ad nauseum that Greece’s sovereign debt was sustainable. Sorry! It wasn’t.
It overestimated the Greeks and their government. Turns out, they weren’t as interested in slashing everything at a time of mass unemployment as the IMF had thought. Or hoped. Or made up. Its bad.
It signed off on postponing a restructuring of Greek debt for two full years because some people (read: Angela Merkel) were worried that the Greeks couldn’t be trusted with a new credit card. This both prolonged Greece’s troubles and made things more expensive for everyone else (read: the Germans). Deepest regrets.
It didn’t count very well: Read more »