Greece rejects idea of new austerity measures

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The Greek government has come out swinging, rejecting the possibility of accepting additional austerity measures after it accused the IMF of using inaccurate figures and of posting a blog with contradictory statements, which in their view compromised the reform negotiations underway between Greece and the institutions.

Government spokesman Dimitris Tzanakopoulos reaffirmed the government’s position on labour and fiscal issues and will be proceeding for the second review of the reform programme without legislating any more measure.

Tzanakopoulos accused the International Monetary Fund (IMF) of using "inaccurate figures" and urged the fund to "respect the Greek people," noting the IMF's failed forecasts in 2012 and 2013, when it predicted growth at a time when Greece went into further deep recession, with the economy contracting at 3.3% and 6.6%.

Regarding the IMF blog authored by Maurice Obstfeld and Poul M. Thomsen, Tzanakopoulos said it was self-contradictory. On the one hand, the two officials criticised austerity and a policy of higher primary surpluses but then said they would accept higher primary surpluses demanded by Europeans in exchange for even more austerity, he pointed out.

"According to the article, the IMF does not want more austerity and defends surpluses of 1.5% after the end of the programme. It causes surprise, however, that the two Fund officials, contradicting themselves, also say they will accept the Europeans' demand for 3.5% surpluses but demand more austerity measures, since they believe the forecasts of the Europeans are too optimistic," he said.

"The Fund's forecasts are mistaken, however, while the information it refers to is false," Tzanakopoulos added, noting that the IMF had itself admitted to using the wrong multipliers in the past. In this case, he added, the IMF had reversed its tactics and inaugurated a series of pessimistic forecasts, which had again been proved wrong.

Tzanakopoulos noted that a reply will also be given by Finance Minister Euclid Tsakalotos and that the government "expected the IMF to not distort reality and not depend on inaccurate or even untrue figures."

"The IMF needs to restore its credibility, not just with Greece but with the international community, insisting on the necessity to reduce primary surpluses to 1.5% after the end of the programme and improving its technocratic competence as regards its forecasts," he said.


GCT Team

This article was researched and written by a GCT team member.