Lagarde: IMF admission of error on fiscal multipliers for Greece ‘a matter of honour’

Addressing the European Economic and Social Committee in Brussels, Lagarde clarified that even in the case that the specific error had been promptly discovered, the IMF’s policy recommendations to Greece would have been the same, but expanded over time.

The IMF head explained that the error with the multipliers was that the impact of the austerity policies implemented in Greece and other eurozone member states was incorrectly calculated in relation to the extent of Greece’s economic recession.

Mrs Lagarde  she attributed the error to lack in related expertise in the global economic scene.

The International Monetary Fund has admitted to major missteps over the past three years in its handling of the bailout of Greece, the first spark in a debt crisis that spread across Europe.