Sunday

20th Aug 2017

EU commission on the defensive over IMF report

  • Rehn (l) and o'Connor face media questions (Photo: ec.eropa.eu)

The European Commission has hit back at criticism over its handling of the Greek debt crisis, insisting that cutting the country's budget deficit and keeping it in the euro was "no mean feat."

Speaking with reporters on Thursday (6 June), Simon O'Connor, spokesman for Olli Rehn, the bloc's economic and monetary affairs commissioner, described as "plainly wrong" assertions in an International Monetary Fund (IMF) report that not enough had been done to promote economic recovery in Greece

Thank you for reading EUobserver!

Subscribe now and get 40% off for an annual subscription. Sale ends soon.

  1. €90 per year. Use discount code EUOBS40%
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

"We fundamentally disagree that not enough was done to promote growth, this is plainly wrong and unfounded," he said.

In a damning 50-page report published on Wednesday night (6 June), the Washington-based fund pointed to a catalogue of errors made by the Troika - composed of the European Commission, IMF, and the European Central Bank.

While acknowledging that Greece had avoided bankruptcy and remained in the eurozone, the report noted that "the recession has been deep with exceptionally high unemployment."

It also claimed that "the EC, with the focus of its reforms more on compliance with EU norms than on growth impact, was not able to contribute much to identifying growth enhancing structural reforms."

The EU executive has become increasingly sensitive to criticism that it has prioritised austerity ahead of steps to stimulate economic growth and reduce crippling levels of unemployment in the eurozone's crisis-hit countries.

Greece is now in its six consecutive year of recession and has seen economic output fall by over 23 percent since 2008.

At 27 percent, it also has the highest unemployment rate in the EU, while over 62 percent of its under-25s are out of work, also the bloc's highest.

O'Connor instead focused on the "number of successes" highlighted in the IMF report. Keeping Greece in the euro was "no mean feat," he added.

He also attempted to play down the significance of the report, remarking that "an assessment by some IMF staff does not reflect an official view."

Meanwhile, the commission also "fundamentally disagreed" with the IMF's conclusion that a deal should have been struck to restructure Greek debts in 2010.

Attempting this "would have risked systemic contagion," O'Connor said.

The IMF had claimed that "an upfront debt restructuring would have been better for Greece although this was not acceptable to the euro partners."

Despite receiving two bail-out packages in 2010 and 2011 worth over €200 billion, Greece's debt burden has swelled to around 190 percent of GDP, far higher than any other EU country.

O'Connor conceded the Greek crisis had been a "learning process," however.

"Of course, looking back in hindsight, we can look back at decisions that would have been taken in an ideal world…. but all partners did their very best in an unprecedented situation," he insisted

O'Connor also revealed the commission is working on its own review into the Greek crisis, although he did not say when it would be published.

For his part, asked by journalists at a monthly press conference if the ECB would offer its own mea culpa on Greece, the bank's President Mario Draghi replied "not really".

"One good thing about this IMF paper is that the ECB is not being criticised," he joked.

Rehn in war of words with IMF

Economic affairs commissioner Olli Rehn joined a bitter war of words between Brussels and the IMF about Greece on Friday.

Airbnb too 'different' to pay EU tax

US home rental firm said its “model is unique” because most of the money stays in pockets of local people, as France and Germany prepare EU tax crackdown.

EU cautious with German diesel plan

The European Commission welcomed the German carmakers' pledge to update software in diesel cars, but is waiting for details on how emissions will be reduced.

News in Brief

  1. Macedonia sacks top prosecutor over wiretap scandal
  2. ECB concerned stronger euro could derail economic recovery
  3. Mixed Irish reactions to post-Brexit border proposal
  4. European Union returns to 2 percent growth
  5. Russian power most feared in Europe
  6. Ireland continues to refuse €13 billion in back taxes from Apple
  7. UK unemployment lowest since 1975
  8. Europe facing 'explosive cocktail' in its backyard, report warns

Stakeholders' Highlights

  1. European Healthy Lifestyle AllianceDoes Genetics Explain Why So Few of Us Have an Ideal Cardiovascular Health?
  2. EU2017EEFuture-Themed Digital Painting Competition Welcomes Artists - Deadline 31 Aug
  3. ACCABusinesses Must Grip Ethics and Trust in the Digital Age
  4. European Jewish CongressEJC Welcomes European Court of Justice's Decision to Keep Hamas on Terror List
  5. UNICEFReport: Children on the Move From Africa Do Not First Aim to Go to Europe
  6. Centre Maurits CoppietersWe Need Democratic and Transparent Free Trade Agreements Says MEP Jordi Solé
  7. Counter BalanceOut for Summer, Ep. 2: EIB Promoting Development in Egypt - At What Cost?
  8. EU2017EELocal Leaders Push for Local and Regional Targets to Address Climate Change
  9. European Healthy Lifestyle AllianceMore Women Than Men Have Died From Heart Disease in Past 30 Years
  10. European Jewish CongressJean-Marie Le Pen Faces Trial for Oven Comments About Jewish Singer
  11. ACCAAnnounces Belt & Road Research at Shanghai Conference
  12. ECPAFood Waste in the Field Can Double Without Crop Protection. #WithOrWithout #Pesticides