WASHINGTON. The International Monetary Fund ( IMF) said on Thursday that lessons from the first bailout program for Greece have been internalized and the current rescue plan is “ on track.”The evaluation report is a standard procedure after a member country has had exceptional access to the IMF funds, as was the case in Greece, and the objective of such a report is to “learn,” said IMF spokesman Gerry Rice at a regular briefing in Washington, D.C.The evaluation focused on the initial Greek bailout program approved in 2010, not the bigger second program which the IMF and the European partners agreed in 2012, he noted.In a self-assessment report released Wednesday, the IMF said there were both “notable successes” and “notable failures” in its first bailout of Greece. The Fund underestimated the damage that fiscal austerity would do to the Greek economy and overestimated the country’s capacity to implement structural reforms.“Market confidence was not restored, the banking system lost 30 percent of its deposits, and the economy encountered a much-deeper- than-expected recession with exceptionally high unemployment. Public debt remained too high and eventually had to be restructured, with collateral damage for bank balance sheets that were also weakened by the recession,” the report said.The Fund also bent its criterion for the bailout program in a tension between the need to support Greece and the concern that its debt was not sustainable with high probability, according to the report.In a separate annual report of the Greek economy released on Wednesday, the Fund said Greece has made substantial progress in strengthening its fiscal position and increasing its competitiveness, but it still needs to plough on with structural reforms to boost growth and generate jobs.
