The House Monetary Policy and Trade Subcommittee examined lessons learned from the International Monetary Fund’s (IMF) bailout of Greece in 2010 and 2012 at a hearing last week.
Several experts testified that the IMF’s bailout of Greece did not help the Greek economy and tarnished the IMF’s reputation. Subcommittee Chair Andy Barr (R-KY) said that with Greece’s economy again in recession and discussions underway for a third IMF bailout, and IMF must learn from past failures and consider other options.
Paul Blustein, senior fellow, Center for International Governance Innovation said the Greek crisis may be the worst debacle in the fund’s history.
“In retrospect, the IMF should not have submitted as readily as it did to European political exigencies; reputation-wise, the Greek crisis has been perhaps the worst debacle in the Fund’s history,” Blustein said.
Meg Lundsager, public policy fellow at the Woodrow Wilson Center, said that while Greece’s outstanding debt to the IMF has dropped to less than $14 billion, its debt to European partners remains over $200 billion.
“Given that the largest share of the debt is owed to Greece’s European partners, this is the opportune time for the IMF to disengage from financing Greece’s adjustment program,” Lundsager said.