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A leaked letter dated 4th of May 2010 from the former IMF head economist has leaked into the Twittersphere warning that the austerity-based rescue programme for Greece will not work.

Former head economist of IMF Olivier Blanchard warned that the Greek rescue programme entails high risk due to the level of necessary fiscal adjustment adding that it can deviate even if it is fully implemented.

Blanchard’s letter was addressed to Poul Thomsen and presented at the end of January during an international conference of the Canadian think tank centre for International Governance Innovation by the professor of Economy Paul Blustein who made a summary of the situation.

“Olivier Blanchard warned that the austerity could go awry, even if done to plan. Dominique Strauss-Kahn (then general director of the IMF) broached debt restructuring but Jean Claude Trichet (then head of the European Central Bank) said no’’ said Blustein.

Asked whether he had leaked the letter Blanchard said “I did not leak but am not too unhappy that it did leak. 7 years already and still no realistic/ clear plan” he said on Twitter.

Meanwhile the Greek Prime Minister expressed optimism as he referenced the latest Eurostat figures, which suggest a return to growth during a meeting with EU Commission for Economic and Financial Affairs Pierre Moscovici.

“According to 2017 and 2018 estimates, Greece will have 2.5 percent and 3.0 percent growth rates,” he stated.

Tsipras stressed that that everyone must acknowledge the importance of these figures and said that they are a reflection of the sacrifices of the Greek people and that there cannot be more talk about austerity measures anymore.

GCT Team

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