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   dcsimg

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1991, serving as Washington correspondent and later Europe correspondent in
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The German bloc will have to take its bitter medicine in Greece

   By Ambrose Evans-Pritchard Economics Last updated: October 31st, 2012

   Comment on this Comment on this article

   Every detail of the Greek economy is worse than officially forecast
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   accurate forecast, given the crazy circumstances in Greece.

   I don't wish to be unduly harsh on the IMF â a superb organisation â
   but actually the Greek Labour Institute and the think-tank IOVE did
   predict this level of contraction.

   The IMF simply lost its political way in Greece. It knew â or should
   have known from dozens on rescue operations around the world â that
   Greece would crash into a self-feeding spiral without a rapid debt
   restructuring and a devaluation.

   Both channels were blocked because of the sanctity of the EMU Project.
   (Though default would come later, in a capricious fashion, singling out
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   illusion for their own internal political reasons.

   Greece cannot claw its way out of a 190pc of GDP debt load. The
   official haircut is coming sooner or later, and it will be an explosive
   political moment.

   Chancellor Angela Merkel will have to account for direct losses to the
   Bundestag. A line will have to be written into the German budget
   covering the X billions of euros. Other line items may have to be cut.
   Welfare support for Germans, perhaps.

   Having insisted for over two years that German taxpayers face no risk
   of loss on the Club Med rescue packages â and having indeed told them
   it generated a profit â she will have to explain why this has gone
   horribly wrong.

   No doubt she will try to delay this awful moment until after the German
   elections late next year. But the calendar of simmering revolt in
   Greece is not in her hands. One of the three parties in the
   pro-Memorandum coalition has already refused to go along with the