Front Matter

Front Matter

International Monetary Fund. Independent Evaluation Office;International Monetary Fund. External Relations Dept.
Published Date:
September 2016
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    Independent Evaluation Office

    of the International Monetary Fund

    The IMF and the Crises in Greece, Ireland, and Portugal

    © 2016 International Monetary Fund

    Cataloging-in-Publication Data

    Joint Bank-Fund Library

    Names: Takagi, Shinji, 1953– | International Monetary Fund. Independent Evaluation Office

    Title: The IMF and the crises in Greece, Ireland, and Portugal / team leader Shinji Takagi.

    Other titles: International Monetary Fund and the crises in Greece, Ireland, and Portugal

    Description: Washington, DC : International Monetary Fund, 2016. | Includes bibliographical references.

    Identifiers: ISBN 9781475525144 (paper)

    Subjects: LCSH: Europe—Economic development. | Financial crises—Greece. | Financial crises—Ireland. | Financial crises—Portugal. | International Monetary Fund.

    Classification: LCC HC240.I485 2016

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    P.O. Box 92780, Washington, DC 20090, U.S.A.

    Tel.: (202) 623-7430 Fax: (202) 623-7201



    The following conventions are used in this publication:

    • An en dash (–) between years or months (for example, 2015–16 or January–June) indicates the years or months covered, including the beginning and ending years or months; a slash or virgule (/) between years or months (for example, 2015/16) indicates a fiscal or financial year, as does the abbreviation FY (for example, FY 2016).

    • Billion means a thousand million; “trillion” means a thousand billion.

    • “Basis points” refers to hundredths of 1 percentage point (for example, 25 basis points are equivalent to ¼ of 1 percentage point).

    As used in this publication, the terms “country” and “economy” do not in all cases refer to a territorial entity that is a state as understood by international law and practice. As used here, the term also covers some territorial entities that are not states but for which statistical data are maintained on a separate and independent basis.

    Some of the documents cited and referenced in this report were not available to the public at the time of publication of this report. Under the current policy on public access to the IMF’s archives, some of these documents will become available 3 or 5 years after their issuance. They may be referenced as EBS/YY/NN and SM/YY/NN, where EBS and SM indicate the series and YY indicates the year of issue. Certain other types of documents may become available 20 years after their issuance. For further information, see


    This report examines the effectiveness of the IMF’s engagement in Greece, Ireland, and Portugal in 2010–14 in order to draw lessons and to enhance transparency. The crises in these countries, coming so soon after the global financial and economic crisis, and occurring in a common currency area comprising highly integrated economies, posed extraordinary challenges to European and world policymakers. The IMF was called upon to provide financing and technical expertise in the management of these crises. The IMF’s role has been a subject of extensive commentary and scrutiny by experts around the world.

    The IEO report approaches the topic by asking whether the IMF’s crisis management was appropriate, given the exceptional circumstances; whether it compromised its best economic judgment because of the way it engaged the euro area; and what it could have done differently to achieve better outcomes. The evaluation concludes that the Executive Board generally played a limited role in its supervisory function, and that the IMF’s overall performance in surveillance and crisis lending was uneven. The IMF’s handling of the euro area crisis raised issues of accountability and transparency, which helped create the perception that the IMF treated Europe differently.

    Based on the lessons drawn from this experience, the report makes five recommendations for the IMF, in order to improve its governance and operational effectiveness. All of these recommendations received full or qualified support from the Executive Board when it met to discuss the report in July 2016. In supporting these recommendations, the Board reaffirmed the role of independent evaluation as key to good governance and as a means of enhancing the IMF’s external credibility.

    I am encouraged by the willingness of the Managing Director and the Executive Board to learn from the past, in order to improve the IMF’s technical capacity and decision-making process. It is hoped that this report, along with systematic efforts to address the issues identified therein, will contribute to strengthening the IMF’s central role in the international monetary system.

    Moises J. Schwartz

    Director Independent Evaluation Office

    The IMF and the Crises in Greece, Ireland, and Portugal

    This report was prepared by an IEO team led by Shinji Takagi. The team included Donal Donovan, George Kopits, Ling Hui Tan, Nicolas Véron, Sanjay Dhar, Silvia Sgherri, Miguel de Las Casas, and Carlos de Resende. Martin Eichenbaum, Russell Kincaid, Felipe Larraín, Francesco Luna, Yung Chul Park, Theodore Pelagidis, Sergio Rebelo, Susan Schadler, and Charles Wyplosz contributed substantive inputs, while Roxana Pedraglio, Franz Loyola, Chris Monasterski, Tam Nguyen, and Joshua Wojnilower provided capable research assistance. The team gratefully acknowledges Annette Canizares, Arun Bhatnagar, and Amy Gamulo for providing administrative assistance and Rachel Weaving, Roxana Pedraglio, and Esha Ray for editorial and production management assistance.

    The evaluation benefited from comments from an Advisory Group comprising Hamad Al Sayari, Jorge Braga de Macedo, Michel Camdessus, Malcolm Knight, Rachel Lomax, Ngozi Okonjo-Iweala, Jean Pisani-Ferry, Guillermo Ortiz, Yaga Venugopal Reddy, and Edwin Truman, who met on April 7, 2016 to discuss a preliminary version of this report. A summary of the discussion is being issued as a background paper to this evaluation (see Boorman, 2016). In addition, Jacques de Larosière, Clemens Fuest, and Hiroshi Watanabe reviewed the draft report to provide comments. Although this final report has benefited from the comments provided by these individuals, the IEO alone is responsible for the views and assessments stated therein. The report was approved by Moises Schwartz.



    Central African Economic and Monetary Community


    Coopération Financière en Afrique Centrale (CEMAC) or Communauté Financière Africaine (WAEMU)


    European Commission


    European Court of Auditors


    European Central Bank


    Eastern Caribbean Currency Union


    Economic and Financial Affairs Council (EU)


    European Deposit Insurance Scheme


    Excessive Deficit Procedure (EU)


    Extended Fund Facility (IMF)


    European Financial Stability Facility


    European Financial Stabilization Mechanism


    Emergency Liquidity Assistance (ECB)


    Economic and Monetary Union (EU)


    ex post evaluation (IMF)


    European Stability Mechanism


    European Union


    Fiscal Affairs Department (IMF)


    Financial Sector Assessment Program (IMF)


    Group of Seven (Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States)


    Group of Twenty (G7 plus Argentina, Australia, Brazil, China, India, Indonesia, Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, and the European Union)


    gross domestic product


    Independent Evaluation Office (IMF)


    International Monetary Fund


    International Monetary and Financial Committee (IMF)


    Long-Term Refinancing Operations (ECB)


    Monetary and Capital Markets Department (IMF)


    Outright Monetary Transactions (ECB)


    private sector involvement


    regional financing arrangement


    Stand-By Arrangement (IMF)


    special drawing right (IMF)


    Stability and Growth Pact (EU)


    Securities Markets Program (ECB)


    Single Resolution Mechanism (EU)


    Single Supervisory Mechanism (EU)


    technical assistance


    Trans-European Automated Real-Time Gross Settlement Express Transfer System (ECB)


    terms of reference


    Triennial Surveillance Review (IMF)


    value-added tax


    West African Economic and Monetary Union

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