EU Economics Uncategorised

Report says the International Monetary Fund is ‘too close to EU’


THE credibility of the International Monetary Fund (IMF) has taken a major blow after its own independent watchdog produced a damning report saying it was politically too close to the eurozone.

Christine Lagarde / EU flagsGETTY  A damning report said the IMF was politically too close to the eurozone

In a damning report, the Independent Evaluation Office (IEO) said that the organisation led by former French finance minister Christine Lagarde had misled its own board and made a series of calamitous misjudgements in Greece.The report has raised serious questions about the IMF’s role in leading international efforts to scare British voters into backing Remain in the EU referendum in two separate reports suggesting brexit would lead to a financial collapse.

The IEO said the IMF became euphoric cheerleaders for the euro project and EU, ignored warning signs of impending euro crisis, and failed to grasp an elemental concept of currency theory.


It said: “The credibility of the IMF comes from the technical competence and independence of its staff and the Managing Director must ensure that its technical work is protected from political influence.”

The IMF lost its characteristic agility as a crisis manager

Independent Evaluation Office

Ms Lagarde, who this year was appointed head of the organisation for a second term with the help of former Chancellor George Osborne, is facing trial over separate issues in France related to alleged corruption.The IEO concluded the IMF had “lost its characteristic agility as a crisis manager” in the way it responded to the economic crises because of its political closeness to the eurozone.

Christine LagardeGETTY

And it warned that this has “raised issues of accountability and transparency, which helped create the perception that the IMF treated Europe differently”.It described a “culture of complacency”, prone to “superficial and mechanistic” analysis and shockingly claimed that “many documents were prepared outside the regular established channels; written documentation on some sensitive matters could not be located.”

Ms Lagarde responded to the report describing the agency’s role in the eurozone crisis as a “qualified success”.““““““

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