Benn Steil

Geo-Graphics

A graphical take on geoeconomic issues, with links to the news and expert commentary.

Print Print Email Email Share Share Cite Cite
Style: MLA APA Chicago Close

loading...

The IMF Is Shocked, Shocked, at Greece’s Fiscal Failure. Should It Be?

by Benn Steil and Dinah Walker
September 26, 2012

fiscal performance relative to targets

The IMF last week told the Greek government to get with the program—specifically, the economic adjustment program that Greece agreed to as a condition for receiving loans from the Fund.  Greece is indeed way off target, but that’s apparently par for the course with such programs.  In 2003, the IMF’s own independent evaluation office looked at the difference between actual and projected changes in fiscal balances in countries receiving funds from its Extended Fund Facilities (EFF) and so-called Stand-By Arrangements (SBA).  As shown in the graphic above, nearly ¾ of market-based countries (that is, countries not in transition from central planning) receiving funds from the EFF or SBA underperformed their targets in the second year of their program.  By this standard, Greece looks like a normal ward of the IMF. However, Der Spiegel reported on Monday that the Troika of official Greek lenders (the European Commission, ECB, and IMF) was now pegging Greece’s budget deficit at €20 billion.  If accurate, that would put Greece on track to miss its IMF fiscal deficit target by €13 billion, or a whopping 6 percent of GDP – making it an extreme target-underperformer even by the standards of the many past underperformers.

Der Spiegel: Troika Nearly Doubles Estimate of Greek Shortfall
IMF: Statement on Mission to Greece
Geo-Graphics: Does “More Europe” Mean More Pro-Cyclical Fiscal Policy?
IMF Evaluation Report: Fiscal Adjustment in IMF-Supported Programs

Post a Comment 3 Comments

  • Posted by skup zlota

    In my opinion Greece is unable to save. This society cannot save or work. They do not understand that they are in the financial tragic situation. Evidenced by the rioting in the streets.

  • Posted by Financial advice

    Hello,
    This society cannot save or work.

  • Posted by GEORGE DAGNINO

    WHY DON’T WE LEAVE ALONE!!!! LET THEM BE WHAT THEY ARE. WHY FORCE THME TO BE PART OF AN OBVIOUSLY FAILED AND TRAGIC EXPERIMENT! WHY MAKE THEM SUFFER!

    GEORGE DAGNINO, PHD

Post a Comment

CFR seeks to foster civil and informed discussion of foreign policy issues. Opinions expressed on CFR blogs are solely those of the author or commenter, not of CFR, which takes no institutional positions. All comments must abide by CFR's guidelines and will be moderated prior to posting.

* Required

Pingbacks