IMF admits Greek bailout errors

 
City A.M. Reporter
THE INTERNATIONAL Monetary Fund (IMF) yesterday said that it lowered its normal standards for debt sustainability to bail out Greece and its projections for the Greek economy may have been overly optimistic.

The IMF was one of a trio of international lenders who in 2010 stepped in to keep the Eurozone country from defaulting on its debt and departing the common currency bloc. The IMF pledged about €30bn (£25.3bn) to Greece at the time, out of a total package of €110bn.

In a report that looks back at the bailout, the Fund for the first time said it lowered its bar for Greece, which could reignite concerns about the lender's impartiality.

The IMF said its support for Greece in 2010 was necessary to prevent the nation's problems from spilling over into the rest of the Eurozone and the global economy.

“There was, however, a tension between the need to support Greece and the concern that debt was not sustainable with high probability,” according to the IMF’s evaluation. “In response, the exceptional access criterion was amended to lower the bar for debt sustainability in systemic cases.”