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WAR OF WORDS: IMF admits to making Greek recession EVEN WORSE

By Catholic Online (NEWS CONSORTIUM)
June 7th, 2013
Catholic Online (www.catholic.org)

It takes a lot of courage and strength to admit you've done something wrong . drastically, terribly wrong. A hot war of words broke out between the International Monetary Fund and the European Union over its botched bailout of Greece. In a telling, wrenching the IMF admitted to "notable failures" in the handling of the Greek crisis and accused European officials of being more concerned with saving the euro than rescuing the debt-ridden country.

LOS ANGELES, CA (Catholic Online) - Headed by Christine Lagarde, the fund said it was forced to break its own rules for providing financial assistance to bankrupt countries because EU leaders refused to take action to solve the crisis.
 
The IMF report, drawn up by staff at the watchdog's headquarters in Washington, triggered a furious response in Brussels where the European Commission said it was "plainly wrong and unfounded."

"We fundamentally disagree," a spokesman for Olli Rehn, European commissioner for economic affairs, said.

In their defense, it was pointed out that Britain was forced to find more than 1 billion to prop up Greece, and in turn the euro, through the U.K.'s membership of the IMF.

In addition, the IMF and the EU granted Greece a 93 billion bailout in May 2010.

The fund now admits there were serious mistakes in the way it and EU officials handled the bailout. According to the catalogue of errors, which included harsh austerity measures on Greece plunged the country deeper into crisis.

"Taxpayers were roped into bailing out Greece via the back door. Now it turns out they botched even that. The eurozone built itself on a debt bubble and it's scandalous that hard-pressed families are shouldering even a penny of that bill," Matthew Sinclair, of the TaxPayers' Alliance says.

Greece is in its sixth consecutive year of recession with unemployment at 27 percent and youth unemployment at 62.5 percent. More than six in 10 young Greeks seeking work can't find jobs.

The EU insists that writing off Greek debt as suggested by the IMF would have led to "devastating consequences" as investors worried about losses in other eurozone countries.

"With hindsight we can go back and say in an ideal world what should have been done differently," a spokesman said. "The circumstances were what they were. I think the Commission did its best in an unprecedented situation."

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