IMF Admits Greece Bailout Blunders
After The Wall Street Journal leaked part of an International Monetary Fund (IMF) internal assessment on the effectiveness of its Greece bailout, the IMF made public the entirety of its 50-page analysis (link opens a PDF) Wednesday evening.
While the report points to "notable successes" of the IMF's first bailout program lasting from March 2010 through May 2012, the majority of the report focuses on critical errors and lessons learned. Among the largest failures were a 30% loss of bank deposits, chronic market fear, an unemployment-wracked recession, and burdensome public debt.
Although the report concludes that IMF interference was a necessity, the IMF lists several major lessons learned. First and foremost, the IMF now recognizes the need to better adjust for the fact that Greece's membership in the European Union should've served as its primary safety net. The IMF also pointed to bureaucracy delays and a lack of political awareness (saying reform efforts "might have been more enduring if more visible progress had been made with regard to getting those on high incomes to pay their taxes") as major flaws of its intervention. Ending on a somber note, the IMF concluded its analysis with a call for more effective risk-sharing and the need for an effective eurozone banking union, exchange rate flexibility, and independent monetary policy.
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