February 26, 2015
When Christine Lagarde offered a sceptical view this week on the new Greek government’s reform plan, the International Monetary Fund chief highlighted just how uncomfortable her institution has become about one of the biggest bailouts in its history.
The IMF’s experience in Greece has been painful, exposing fault lines between its traditional US and European paymasters and emerging powers keen for greater influence over global finance.
“Greece so far has not been a brilliant chapter in the IMF’s history,” says Paulo Nogueira Batista, who represents Brazil and 10 other countries on the fund’s board. “Rules were bent and broken to suit the needs of the euro area.”
The result, he argues, has been damage to the institution’s credibility.
The IMF joined the EU’s financial rescue of Greece in 2010 and its board since then has approved two separate programmes, each worth approximately €30bn and greatly exceeding the fund’s normal lending limits.
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