The International Monetary Fund internal report on the bail-out of Greece, leaked to the Wall Street Journal, indicates that the bail-out had nothing to do with saving the Greek economy. It was solely about saving the euro.
The report identifies that the bail-out was not drawn up to help Greece but was a “holding operation” that “gave the Euro area time to build a firewall to protect other vulnerable members and averted potentially severe effects on the global economy”. It also says unexplained delays in implementing the bail-out shifted the debt from private banks to the public purse.
It turns out that the bail-out was more an amateur experiment than support. With the “troika” of IMF, European Commission and European Central Bank, overseeing the Greek economy it clearly cannot recover. That’s true for the economies of Ireland, Portugal and Cyprus too.
Needless to say the European Commission repudiated the report. The European Central Bank President dismissed it without reading it, committed to the ECB’s do-nothing strategy as unemployment soars and businesses across Southern Europe crumble.
The German Bundesbank Chief Executive, meanwhile, says, “It is not the duty of the ECB to rescue states in crisis...the ECB has no mandate to uphold the current composition of monetary union.” ■