One has to know that the International Monetary Fund (IMF) is doing something right when, in a recent speech, Greek Prime Minister Alexis Tsipras blasts the organization for its unconstructive role in his country. This is especially the case when the two grounds for his criticism are, first, that the IMF is insisting that Greece become very much more serious about its structural economic reform program, and second, that the IMF is demanding too much of Greece’s European partners by way of extending Greece debt relief.
For taking now the firmest of stances with Greece in the face of intense European political pressure, Christine Lagarde, the IMF’s managing director, is to be applauded. In the year ahead, it is to be hoped that she sticks to her guns by insisting on both serious structural reform and major debt relief as the two basic conditions for the IMF’s renewing its Greek lending program, which is due to expire in March 2016. This would not only be for the sake of restoring IMF credibility, but also for the sake of Greece’s future welfare.
To say that Greece’s economy is in the greatest of shambles would be a gross understatement. Five years after its debt crisis began, the Greek economy is now experiencing an economic depression at least on a par with that experienced by the United States in the 1930s. Of particular concern has to be the fact that this depression shows little sign of abating and that youth unemployment remains stuck at over 50 percent. It is also disturbing that, absent further debt restructuring, Greece’s public debt to gross domestic product (GDP) ratio is headed to rise to well over 200 percent of GDP.
Full text of this article is available at TheHill.com.
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