Thursday, June 06, 2013

What took them so long?

The IMF has admitted that there were serious mistakes in the the bailout programmes imposed on Greece. I and many, many others could have told them that years ago. Never mind, the first stage in adjusting policy to match reality is to admit error, even if it is hedged round with justifications and many of the underlying assumptions are unchanged.

The report holds its hands up to admit that:
Market confidence was not restored, the banking system lost 30 percent of its deposits, and the economy encountered a much deeper-than-expected recession with exceptionally high unemployment. Public debt remained too high and eventually had to be restructured, with collateral damage for bank balance sheets that were also weakened by the recession. Competitiveness improved somewhat on the back of falling wages, but structural reforms stalled and productivity gains proved elusive.
The human and political cost? Can't find much about that. But maybe, just maybe, this is the beginning of an acknowledgement that there needs to be a policy change. Though how long this may take ...

A splendid editorial here

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