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article imageInternational Monetary Fund knew Greek program would fail

By Katerina Nikolas     Jul 26, 2012 in World
Athens - As the threat of Greek bankruptcy and euro exit once again looms, Greece's former representative to the International Monetary Fund (IMF) has revealed the IMF knew from the outset that the program it prescribed for Greece would fail.
Former Greek finance minister and Greece's representative to the IMF until January, Panagiotis Roumeliotis, has spoken of the bail-out Memorandum imposed on Greece by its Troika of lenders, the IMF, EU and ECB. To Vima reported Roumeliotis accused the Troika of underestimating the negative affects the austerity program would have on the Greek economy, pushing it deeper into recession.
In an interview with the New York Times Roumeliotis revealed officials at the IMF knew the program was doomed to failure. He said "We knew at the fund from the very beginning that this program was impossible to be implemented because we didn't have any - any - successful example."
He added that whilst the IMF uses Greece's failure to implement structural reforms as an excuse for the programs failure, the real cause "is that the severe cuts contributed to the downward spiral by decimating economic demand within Greece."
Roumeliotis's words reiterate those of German Chancellor Angela Merkel who admitted in June that Greece's program of austerity was important even if it did not succeed, in order to set an example to other European countries to adhere to their future obligations within the EU.
Earlier this week Digital Journal reported that unidentified European Union officials had leaked the information that the IMF had lost patience with Greece and was ready to pull the plug on any further financial assistance.
Nevertheless, the Greek coalition government is rushing to prepare proposals to be presented to the Troika on Friday which will entail a further €11.5 billion in cuts, reneging on pre-election promises to the electorate.
More about Panagiotis Roumeliotis, Imf, Greek crisis
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