That was the prodigal sin in the whole Greek and Eurozone debt problem!
The IMF is the world’s center of competence for Balance of Payments problems of countries. They may not always have the right recipes for economic turn-around’s (and more often than not they don’t) but they have all the blue prints for restructurings of sovereign debt. Furthermore, when countries develop ire at austerity measures, which they naturally always do, their ire goes against the IMF as a supra-national institution and not against individual countries (i. e. like against Germany).
I am certain that the IMF would have followed the traditional policy that “risk takers must remain risk carriers”. In other words, the focus would have been on rescheduling existing debt with existing creditors instead of using tax payers’ money and Greece’s balance sheet to pay out private creditors (and call that ‘help for Greece’). Only the Fresh Money requirements, which were about 20% of the total rescue funding disbursed todate, would have been handled by official institutions like the IMF, EU and/or ECB.
So, Mr. Papandreou can indeed tell the Harvard students at his lectures there that he had the right idea from the start and that things would be much better today if the EU had allowed him to pursue his ideas. That’s quite a vindication. However, he should also be prepared to answer the following question which a clever Harvard student might ask: “If you were so convinced that you had the right idea for your country, why did you cave in?”