IMF admits: We’re too pro-Brussels
After that Greek economic disaster...
THE International Monetary Fund has admitted its officials made mistakes because their pro-EU bias affected their analyses – just weeks after they issued dire warnings about Brexit.
In a scathing report about the IMF’s handling of the eurozone crisis, its own independent watchdog criticised a ‘culture of complacency’ and said the organisation is prone to ‘superficial and mechanistic’ analysis.
The IMF’s Independent Evaluation Office said it failed to predict problems with the single currency that led to Greece and other EU countries needing massive bailouts in 2010 – because of its ‘group thinking’ approach.
Inspectors found that before the launch of the euro in January 1999, the IMF publicly ‘emphasised the advantages of the common currency more than the concerns’, despite worries from individual staff members.
The report said: ‘After a heated internal debate, the view supportive of what was perceived to be Europe’s political project ultimately prevailed in guiding the Fund’s public position.
‘The IMF remained upbeat about the soundness of the European banking system and the quality of banking supervision in euro-area countries until after the start of the global financial crisis in mid-2007. This lapse was largely due to
‘Extremely politicised behaviour’
the IMF’s readiness to take the reassurances of national and euro area authorities at face value.’
Eurosceptics last night argued the report showed why they were right to question the IMF’s credibility before the Brexit vote.
Ahead of the referendum, IMF managing director Christine Lagarde, an ally of former chancellor George Osborne, said the consequences for the UK of leaving the EU would range from ‘pretty bad to very, very bad’.
Tory MEP Daniel Hannan said: ‘ The IMF behaved in an extremely politicised way during the referendum. Its report on Brexit was tendentious and so one-sided it was not true.
‘I expected to be vindicated, but not so soon and not by the IMF itself. It is extraordinary.’
Nadine Dorries, Tory MP for Mid Befordshire, mocked how the IMF had been referred to as ‘highly respected’ in television news reports about its Brexit warnings in the run-up to the referendum. She wrote on Twitter: ‘ MPs who challenged IMF assertions were castigated and presented as barking.’
Last week the IMF faced the embarrassment of admitting the British economy will grow faster than Germany and France in the next two years, just weeks after predicting leaving the EU could trigger a recession here. The IMF now expects the British economy to grow by 1.7 per cent this year and 1.3 per cent next year.
That is weaker than the 1.9 per cent and 2.2 per cent growths forecast before the referendum, but the UK is still set to be the second-fastest growing economy in the Group of Seven industrialised nations this year – behind the United States – and third-fastest next year, behind the US and Canada. It was not the first time the IMF had to row back from damaging comments about the UK economy.
In April 2013, the fund’s then chief economist Olivier Blanchard said the British Government was ‘playing with fire’ by pressing ahead with austerity at a time of ‘very low growth’. But the IMF was later forced to admit it ‘got it wrong’ as the UK economy sprang into life.
Meanwhile, the EU’s popularity has fallen in 20 out of its 28 member states in the past six months, according to its own polling.
A survey of nearly 28,000 citizens found that those in three other EU countries dislike Brussels even more than the British. Some 36 per cent of Britons said they had a negative opinion of the EU, compared to 37 per cent in Austria, 41 per cent in Cyprus and 51 per cent in Greece.
ANYONE who still doubts the economic wisdom of Brexit should study yesterday’s oh- so-revealing trade figures for 2015 from the Office for National Statistics.
For they confirm a long-running trend which has seen Britain become less reliant on the statist EU, as our exporters exploit lucrative markets elsewhere.
Indeed, exports to our partners last year shrank to a paltry 12 per cent of our national output. Yet for the sake of this fraction of our economy, every business has had to bear the full weight of Brussels regulation (that’s not to mention the social burden of uncontrollable immigration).
Indeed, with the UK a substantial net importer from the EU – particularly Germany – a picture emerges of a relationship failing to deliver the benefits promised by starry-eyed europhiles.
Meanwhile, an in-house watchdog has launched a lacerating attack on the International Monetary Fund’s senior staff over their ‘calamitous’ misjudgments in pursuing a love affair with the euro, which has condemned much of the continent to economic sclerosis.
These are the ‘experts’, remember, who with our stagnating partners repeatedly lectured us about the folly of Brexit.
Yes, there may be a temporary economic price for the turbulence of reclaiming our independence. But the long- term prospects for this country look ten times healthier than for those locked in the EU.