Peter Doyle, an economist in the IMF’s European department, also used the letter to attack the appointment of Christine Lagarde, the fund’s managing director. The allegations are particularly embarrassing coming from someone who until last month was a senior official at the Washington-based institution and at a time when Europe’s debt crisis shows little sign of easing.
“The substantive difficulties in these crises, as with others, were identified well in advance but suppressed here (at the IMF),” Mr Doyle wrote in the letter to Shakour Shaalan, head of the IMF’s board of directors. The letter goes on to claim that “the failure of the fund to issue them (warnings) is a failing of the first order, even if such warnings may not have been heeded”.
The IMF, which has played a central role in the bail-outs of Greece, Portugal and Ireland, has recently tapped countries from the UK to China for another $500bn (£320bn) to be deployed in Europe, should the debt crisis escalate. Mr Doyle, whose 20-year career at the fund included spells in Sweden, Denmark and Israel, said its failure to give a warning has led to “suffering” in Greece and elsewhere and left it “playing catch-up and reactive roles in last-ditch efforts to save it (the euro)”.
Last year’s election of Ms Lagarde, the former French finance minister, is also criticised by Mr Doyle as illegitimate. The selection process for the top job at the IMF has come under increasing criticism for failing to reflect the changing economic balance of power in the world. Since the IMF’s founding in 1944, a European has always had the top job, while an American has run the World Bank.
“Even the current incumbent is tainted, as neither her gender, her integrity, nor elan can make up for the fundamental illegitimacy of the selection process,” says the letter.
The Telegraph
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