IMF admits 'notable failures' in 2010 Greece rescue

WASHINGTON (AFP) - The International Monetary Fund admitted on Wednesday that there were "notable failures" in preparing the first Greek rescue that forced a second, larger bailout.

The IMF said it went ahead with the high-risk bailout using overly optimistic estimates of Greece's debt sustainability and overestimating Athens' ability to implement structural reforms.

It also said in a review of the 2010 rescue that it and its troika partners, the European Commission and the European Central Bank, had coordination problems, and differing levels of expertise and goals.

"Given the danger of contagion, the report judges the program to have been a necessity, even though the Fund had misgivings about debt sustainability," it said.

"However, there were also notable failures. Market confidence was not restored, the banking system lost 30 per cent of its deposits, and the economy encountered a much deeper-than-expected recession with exceptionally high unemployment."