The Chairmans Summing Up The Imf And The Crises In Greece Ireland And Portugal An Evaluation By The Independent Evaluation Office Executive Board Meeting 16 69 July 19 2016

Executive Directors welcomed the report by the Independent Evaluation Office (IEO) on the IMF and the Crises in Greece, Ireland, and Portugal, and appreciated the accompanying statement by the Managing Director. They agreed that the report’s findings provide valuable insights and lessons for handling crises in members of currency unions. Directors underscored that the work of the IEO continues to play a vital role in enhancing the learning culture within the Fund, strengthening the Fund’s external credibility, and supporting the Executive Board’s oversight responsibilities. Directors broadly shared the general thrust of the IEO’s main findings and broadly endorsed its recommendations, with some caveats.

I welcome the report of the Independent Evaluation Office (IEO) on the Euro Area crisis programs. Their work provides an independent and in-depth account, which I have no doubt will make an important contribution to understanding the Fund’s approach to the crisis. As I have emphasized repeatedly, the IEO plays a vital role in enhancing the learning culture within the Fund, strengthening the Fund's external credibility, and supporting the Executive Board's institutional governance and oversight responsibilities.

During the past financial year, the IMF’s 189 member countries faced a number of pressing challenges. IMF work on these challenges - slower trade, declining productivity, gender inequality, inclusive growth, and debt management - is a central focus of this 2017 Annual Report.

This evaluation assesses the decision-making processes that guided the evolution of the application of the Fund's mandate, the criteria and principles used to operationalize engagement in newer policy areas, and the coherence of the Fund's framework for engaging with partners. It finds that the systematic widening of the Fund's areas of work is posing adaptation challenges, necessitating trade-offs, and overburdening staff within a context of budgetary and expertise constraints. The evaluation offers a framework for approaching these challenges that is centered on a trilemma that exposes the tension between the steady expansion of the Fund's scope of work, its limited resources, and the need to maintain the high quality and value-added of its policy advice. It identifies several problems within this framework, including the ad hoc decision-making process for engaging in newer policy areas, which lacks a longer-term strategic anchor. Furthermore, decisions on policies, resources, and risks were taken in a piecemeal manner, without due consideration for crossed effects. It also identifies several open questions regarding the depth and frequency of the Fund's engagement in newer policy areas and the lack of an institutional approach to Fund partnerships.The evaluation proposes classifying newer policy areas across a spectrum of recommended engagement, ranging from signaling their macrocriticality while leaving deeper assessments to other institutions, to in-depth high-frequency engagement. It also offers four main recommendations: (i) developing an inclusive Fund-wide institutional strategy for engagement in newer policy areas that better links decisions related to scope, resources, and risks; (ii) producing budget data that enables the tracking of Fund activities and operations by policy area; (iii) updating the 2022 Guidance Note for Surveillance to enhance the clarity of principles for engagement; and (iv) adopting a Board-approved high-level Statement of Principles for engagement with partners.

(IEO), which provides an early evaluation of the Fund’s emergency response to the initial stage of the COVID-19 pandemic and seeks to draw lessons from the experience for responding to possible future global crises. They highlighted the report’s key finding that the Fund’s response was effective and agile to a crisis like no other, despite the extraordinary challenges and risks, as the Fund rapidly adapted its lending framework and internal processes to serve the membership, help to close large financing gaps, and give confidence to the membership and markets by making its resources available expeditiously under adequate safeguards. Besides lending, Directors noted that the Fund also undertook useful analytical work and gave extensive and timely policy advice and capacity development. They welcomed the report’s finding that the Fund’s corporate response was adapted quickly, including by reprioritizing work, introducing HR and budget initiatives, and swiftly embracing the virtual environment. Directors especially commended staff for their strong dedication during these challenging circumstances.

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Executive Directors welcomed the report of the Independent Evaluation Office (IEO) on IMF Engagement with Small Developing States (SDS) and appreciated its insights and recommendations. They welcomed the report’s finding that the Fund has substantially stepped up its engagement with its SDS members over the past decade, and that SDS country officials generally considered Fund surveillance and capacity development (CD) activities of high quality and well-tailored to their needs.

This paper provides a comprehensive survey of pertinent issues on sovereign debt restructurings, based on a newly constructed database. This is the first complete dataset of sovereign restructuring cases, covering the six decades from 1950–2010; it includes 186 debt exchanges with foreign banks and bondholders, and 447 bilateral debt agreements with the Paris Club. We present new stylized facts on the outcome and process of debt restructurings, including on the size of haircuts, creditor participation, and legal aspects. In addition, the paper summarizes the relevant empirical literature, analyzes recent restructuring episodes, and discusses ongoing debates on crisis resolution mechanisms, credit default swaps, and the role of collective action clauses.