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Editor’s blogFebruary 6 2015

Germany shares responsibility for Greek failure

With Greece and Germany at stand off since the former elected the anti-austerity Syriza party to power, Brian Caplen looks at the actions of the Germans and the European Commission that led to this situation.
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The IMF has learned the hard way that if imposing hard line economic policies on a borrower has too high of a social cost, the policy ultimately has negative repercussions.

These repercussions could result in a political backlash, as is the case in Greece, or lead to a situation such as that in Indonesia in 1998, when an overly austere IMF package led to riots.

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