The International Monetary Fund is to admit that it has made serious mistakes in the handling of the sovereign debt crisis in Greece, according to internal reports due to be published later on Wednesday.
Documents presented to the Fund’s board last Friday will reveal that the Washington-based organisation underestimated the damage austerity would cause to the eurozone country, which has required two bailouts in the past three years.
The Wall Street Journal reported that the papers would say that financial support from the Fund, the European Central Bank and the European Commission had bought time for Greece but had only been made possible because the IMF had bent its own rules to make the country’s debt look more sustainable than it was. According to the WSJ report, Greece failed to meet three of the Fund’s four tests to qualify for help.
A Fund spokeswoman said: “We will be publishing a number of papers on Greece later today. The board met last Friday to discuss several documents on Greece including the review of its programme and its annual economic assessment.”