IMF because Greece could leave problems paying loans … – Management Journal

The Washington-based institution recognized that broke many of their own rules to lend to Greece.

The Greeks say the IMF as one of the causes of the crisis in their country. (Photo: Reuters)

WASHINGTON , (Reuters) .- As Finance Minister France in 2010, Christine Lagarde objected to the International Monetary Fund ( IMF ) be involved in Greece.

Now, at a time when the country is on the brink of a default by a stretch of 1,600 million euros (1,800 million) of debt issued by the international lender, the mandate of Lagarde front to IMF will be marked by Greece, on Sunday held a referendum that could clear the way for his exit from the euro zone.

The institution with headquarters in Washington acknowledged that broke many of their own rules to lend to Greece.

IMF ended up supporting the austerity measures proposed by the European Commission and the Bank European Central, its partners in the “troika” of creditors of Athens, instead of leading the negotiations as he had done with other countries, including Russia, and during the financial crisis in Asia.

The fact that the IMF has provided loans to Greece on behalf of Europe, which has nominated every manager of the lead agency since its creation in 1946, could expose the institution to greater scrutiny, especially due it has 24,000 million in outstanding Greek loans, part of the largest program ever.

“When it became clear that the program of Greece had a poor performance, they did not push enough in the area euro, which at that time had a wrong policy emphasis that focused only on austerity, “said Jacob Funk Kirkegaard, a member of the Peterson Institute in Washington.

The Fund in Greece and continued support led to decisions by the governments of the euro area it caused a deep division within the institution.

Some economists IMF had doubts on loans to Greece 2010 under the restrictions of the “troika” of lenders, where the Fund would be a junior partner of the European Central Bank and the European Commission.

Members of IMF also they protested the “exceptional” size of the program because Athens did not meet the Fund’s criteria for debt sustainability, which means you would have trouble paying.

The IMF , however, he agreed to participate in a joint rescue with Europeans of 110,000 million euros for Greece, persuaded by the fear that the crisis could spread to Athens French and German banks.

Subsequently, the Fund admitted that its forecasts for the Greek economy had been too optimistic. Instead of growing after a year of austerity measures, Greece’s economy fell into one of the worst recessions that have hit the country in peacetime and its production fell 22 percent between 2008 and 2012.

If Greece fails to pay the 24,000 million dollars due to the IMF , that would seem tiny previous default of countries such as Sudan, Zimbabwe and Somalia.