Talk about a mea culpa. The International Monetary Fund is set to admit that it has made a number of big mistakes over the last three years in its handling of the bailout of Greece, which has been the epicenter of the euro zone’s long-running sovereign debt crisis, The Wall Street Journal’s Matina Stevis reported Wednesday.
Citing an IMF document marked “strictly confidential,” the Journal said the Washington-based fund admits significantly underestimating the damage its demands for austerity would do to the Greek economy, which remains stuck in a lengthy and severe recession.
That sounds likely to add fuel to the backlash against the German-led, austerity-first approach that’s characterized Europe’s response to the debt crisis.
According to the report, the IMF also admits it bent its own rules to make Greece’s massive debt load seem sustainable and finds that, in retrospect, the country actually fell short on three of four of the IMF’s criteria to qualify for assistance.
Stevis reports that the document, which was prepared by IMF staff, is expected to be released to the public on Thursday.
(source: market watch)
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