Wednesday, December 14, 2011

Austerity fails in Greece

For the past year, whenever the IMF, ECB, and politicians have talked about Greece, its always been about the need for austerity: more cuts, more sackings, less spending. And now, that austerity has had the predictable result: economic collapse:

The International Monetary Fund slashed its growth forecasts for Greece and warned that ever-deepening recession was making it harder for the debt-ridden country to meet the tough deficit reduction targets under its austerity programme.

In a report likely to fan financial market concerns about a possible debt default, the regular health check by staff at the Washington-based Fund said the situation in Greece had "taken a turn for the worse".


The IMF, together with the European Union and the European Central Bank has imposed tough conditions on Greece as the price of financial support that has allowed the government in Athens to continue paying its bills. In the fifth report carried out since the start of the crisis 18 months ago, IMF officials suggested that the austerity programme might need to be eased in view of the damage being caused to the economy by the recession.

At least they seem to finally be realising that they've made a mistake. Unfortunately, it will be the Greek people, rather than these unelected foreign technocrats, who will suffer the consequences.