The IMF’s guilt and Greek opportunity

Friday, June 07, 2013

The IMF’s retrospective guilt of recognizing the Greek rescue plan’s errors will most not contribute towards Greece exiting the crisis The IMF’s reflection is too late and cannot affect the impact of the recession nor the debt haircut. It was obvious from the start that neither Greece nor Europe, not even the IMF which was culled in as the de facto expert, were in the position to manage and deal with such a crisis. As revealed by the IMF’s report, it was a game of political compromise and half measures that ultimately extended the crisis rather than deal with it entirely. That is the price we pay, an unprecedented recession and explosive unemployment.
The denunciations of responsibility have little value when it is a fact that Greece would be unable to deal with the crisis alone, without help and would likely be worse off. It is important though to point out that both the European Union and the IMF did not have a solid policy and had to resort to experiments to handle such a situation. To an extent Greece has paid for the political lethargy and lack of vision of its partners and its own political leadership.
It is also obvious that a political and interest conflict between Europe and the International Monetary Fund is under way; a conflict that masks the differences of Europe and the US and a number of countries with a dominant role in the IMF. This conflict is ongoing and the question is how it will affect Greece’s effort to overcome the crisis. If it will result in revising the politics followed until now, if it will give the Greek government the leeway to negotiate more flexible terms for the implementation of next year’s program and mainly if it will allow a new settlement of the Greek debt. The management of the internal political scene will be a crucial point, since the IMF has dubbed the Greek management of the crisis so far to be problematic.
In any case Europe appears to be revising its politics. The obsession with strict austerity politics is under attack, while the bank rescue matter has yet to be resolved. The next few months will be important in determining which side dominates. The Greek government must avoid its own mistakes and hope that today’s admissions of error will allow the people to catch a few more breaths that will us break this vicious cycle of recession.

TO VIMA