Paul Taylor reports in MF's 'never again' experience in Greece may get worse Reuters 06/10/2015 that the IMF has been more realistic on some occasions than the EU elite consensus on Greece:
In 2013, the IMF published a critical evaluation of its own role in the first Greek bailout in 2010, arguing that it should have insisted on a "haircut" on Greece's debt to private creditors from the outset. Instead it went along with European governments frightened of a Lehman-style market meltdown and keen to shield their banks from losses.
The report, compiled by Fund staff, said IMF officials had doubts about Greece's ability to repay its loan at the time but agreed to the plan because of fears of contagion from Greece's predicament affecting other European states.
A 2010 IMF staff position note described default on any debt in advanced economies as "unnecessary, undesirable and unlikely", yet 18 months later the IMF advocated a 70 percent "haircut" on Greek government debt as a condition for continued involvement in lending to Athens.
Now IMF chief Christine Lagarde is hinting that European governments need to give Greece debt relief to make the numbers add up, but since this is politically unacceptable in Germany, she has had to talk in code in public.
"Clearly, if there were to be slippages from those (fiscal) targets, for the whole program to add up, then financing has to be considered," Lagarde told a news conference last week.
Behind closed doors, IMF officials are telling the Europeans that Greece will not survive without a third bailout program, which will require debt restructuring by European governments.