Thursday

23rd Mar 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

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

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.

Stolen Russian billions ended up in EU states

Illicit money flowing out of Russia ended up in almost every single EU state, an investigation has found, posing questions on the integrity of Europe’s banking systems.

News in Brief

  1. Man arrested in Antwerp after trying to mow people down
  2. Marine Le Pen goes to Russia
  3. Dutch post-election talks prioritise green-right coalition
  4. EU summons Turkish envoy over threats to Europeans
  5. British police make first arrests in London terror probe
  6. EU commission has received Facebook reply on WhatsApp
  7. Rome expects thousands of protesters at summit
  8. Dijsselbloem says his comments had 'Dutch directness'

Stakeholders' Highlights

  1. Malta EU 2017New EU Rules to Prevent Terrorism and Give More Rights to Victims Approved
  2. European Jewish Congress"Extremists Still Have Ability and Motivation to Murder in Europe" Says EJC President
  3. European Gaming & Betting AssociationAudiovisual Media Services Directive to Exclude Minors from Gambling Ads
  4. ILGA-EuropeTime for a Reality Check on International Day for the Elimination of Racial Discrimination
  5. UNICEFHuman Cost to Refugee and Migrant Children Mounts Up One Year After EU-Turkey Deal
  6. Malta EU 2017Council Adopts New Rules to Improve Safety of Medical Devices
  7. Nordic Council of MinistersNordic Energy Research: How to Reach 100 Percent Renewable Energy
  8. Party of European SocialistsWe Must Renew Europe for All Europeans
  9. MEP Tomáš ZdechovskýThe European Commission Has Failed in Its Fight Against Food Waste
  10. ILGA-EuropeEP Recognises Discrimination Faced by Trans & Intersex People
  11. Nordic Council of Ministers25 Nordic Bioeconomy Cases for Sustainable Change
  12. European Free AllianceSupporting Artur Mas: Democracy and Freedom Cannot Be Convicted

Latest News

  1. 'No zero terror risk', EU security commissioner warns
  2. UN could step in where EU fails in child migrant protection
  3. May: London attacker was known to the police
  4. Ending the migrant deal with Turkey may save the EU
  5. Poland unlikely to face EU discipline on rule of law
  6. Rutte courted Wilders' voters, now he must deliver
  7. Barnier to UK: trade talks will come after settling accounts
  8. EU declaration to voice unity in troubled times