Lagarde Hopes IMF Work in Europe Will Be Appreciated “One Day”

By: EW News Desk Team   Date: 1 July 2013

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01 July 2013

Acknowledging that austerity measures across Europe are “painful”, head of International Monetary Fund Christine Lagarde said she hopes that the Fund’s work will one day be appreciated and be judged over the longer term, noting the IMF’s policy success during the Asian crisis in the late 1990s.

In a climate of fierce opposition to austerity measures in Europe, Lagarde said that only time will allow the merits of the International Monetary Fund's role in the region, where it is engaged in four state bailouts, to be understood.

Acknowledging that terms of the bailout are “painful”, she said that the success of the IMF’s economic prescriptions should be judged over the long term.

"In Asia, the countries which bitterly criticized the IMF are today grateful to have been pushed to enact reforms. I hope that one day the IMF action in Europe will be appreciated" in the same way, she said.

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In an interview with the AFP, Lagarde said Greece remains high on her agenda and voiced hope that the country’s government would survive even as international creditors continue to press for reforms.

But she denied rumours that tensions between the IMF and European Commission could spell the end of the so-called troika of international lenders,

"I think there is not one European official who says today, in the current programmes and in the near future, that the IMF isn't necessary," she said.

In a scathing internal evaluation of the first bailout of Greece three years ago, the IMF admitted in June to putting the eurozone and euro’s safety before the interests of Athens and said it had underestimated the damage that government spending cuts and tax increases would do to the Greek economy.

But the IMF insists that no matter what it did then the country would have suffered a deep recession, and the “overall thrust of policies” used by the troika were “broadly correct”.

European Union officials, by contrast, still refuse to concede that their approach to the financial crisis and use of austerity has been deeply flawed.

Related: EU, IMF Clash Over Botched Handling of Greek Bailout

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