Draghi on the IMF and Greece: Hindsight’s a wonderful thing

June 6, 2013

ECB President Mario Draghi had an interesting couple of things to say about historical perspective at his press conference on Thursday, responding to the IMF’s admission that it lowered its normal standards to bail out Greece, among other things.

While the EU Commission came out and said┬ásome of the IMF’s conclusions were flatly wrong, Draghi took another approach. Basically, hindsight is a wonderful thing:

“If this paper by the IMF, which I have read, besides being a mea cupla, identifies the reasons for mistakes that have been made an other things, we certainly have to take them into account in the future.

Often, these mea culpa, are in fact I would call mistake of projection, a mistake of historical projection – namely that you tend to judge things that happened yesterday with today’s eyes.

We can’t forget that four, five years ago – when discussions about the adjustment of Greece were taking place – that the climate in general was much, much worse.

You remember the fear of contagion there and the very very high volatility. That’s in a sense where the fragmentation of the euro area began to start. So it’s always very hard to pass ex-post judgements on what happened four years ago.

But having said that, more than looking backward, why don’t you look forward? And just take stock of the extraordinary progress and the positive route that’s been undertaken.”

Of course, the corollary of Draghi’s view is that it becomes difficult to ever admit to making a mistake.

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