IMF in Greece: in the shadow of the Washington Consensus

Abstract:

The economic crisis in Greece has proved more complex than expected. The crisis has raised difficult challenges for the Troika and more so for the IMF. Since 2010, the Greek authorities have repeatedly requested bailout loans from the IMF in exchange for macroeconomic and structural adjustments. Under the stand-by arrangement (SBA) and the extended fund facility (EFF) of the IMF, Greece had to implement fiscal discipline by reducing its soaring public expenditures. The deregulation of the labour market was designed to regain economic competitiveness. Minimising the presence of government in the market and catalysing greater foreign direct investment (FDI) were the main reasons for a strong IMF push for privatisation.

In this context, this article argues that the IMF has promoted the Washington Consensus policies through its programme conditionality. The economic and social costs of the programmes have been enormous so far. In addition, the programmes have not been successful in ensuring economic growth and capital market access either. The failure of the IMF policies in Greece also amplifies the limitations and confusions within the institution itself.