NEWS

IMF team reviews effectiveness of adjustment plan

International Monetary Fund representatives were recently in Athens to speak to officials involved in drawing up Greece’s first memorandum of understanding with the troika in 2010 as well as with opponents of the bailout terms as the Washington-based organization attempts to assess the effectiveness of the agreement.

Kathimerini understands that a team of IMF experts has been set up to review the Greek bailout. The exercise comes in the wake of the IMF’s chief economist, Olivier Blanchard, admitting that the organization had underestimated the recessionary impact of austerity measures in Greece and other countries. In January, Blanchard said the IMF assumed the fiscal multiplier of spending cuts and tax hikes was around 0.5 percent of gross domestic product but discovered that it was actually between 0.9 and 1.7 percent.

The team assessing the Greek program is led by James Gordon, who is the deputy director of the IMF’s Office of Budget and Planning.

While in Athens, IMF experts met with Greek officials such as former Finance Minister Giorgos Papaconstantinou and Bank of Greece Governor Giorgos Provopoulos but, according to sources, also spoke to academics that were highly critical of the memorandum from the start. Kathimerini understands that the IMF is also speaking to officials and experts outside of Greece in its bid to assess whether mistakes were made in the formulation of the Greek program.