The IMF’s management of the financial crisis that rocked the EU in 2010-13 has been criticised in an independent report released today.
“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,” the Independent Evaluation Office (IEO) of the IMF said. “Conducting this evaluation proved challenging. Some documents on sensitive issues were prepared outside the regular, established channels; the IEO faced a lack of clarity in its terms of reference on what it could or could not evaluate; and there was no clear protocol on the modality of interactions between the IEO and IMF staff. The IMF did not complete internal reviews involving euro area programs on time, as mandated, which led to missed opportunities to draw timely lessons.”
The IEO acts as a watchdog for the IMF, probably the world’s most influential transnational financial institution.
The Financial Times said in a comment today that the report “does provide ammunition for the view that Europe’s outsized influence over the governance of the IMF must continue to decline if the institution is to retain credibility.”
“As the crisis spread across the eurozone, for example, there was a clear conflict of interest in Dominique Strauss-Kahn being head of the IMF (who resigned in May 2011),” the IEO says. “The former finance minister’s ambition to stand for the French presidency was well known, arousing suspicions that political considerations, particularly with regard to writing off debt to European creditors, were affecting the fund’s judgment.”