Christine Lagarde tells the EU’s Economic and Social Committee that the multiplier was closer to 1.7 than to 1 for Greece and Portugal , and that these countries should have enjoyed more time to reduce their deficit;

IMF admits it underestimated the fiscal multiplier

Speaking at the EU’s Economic and Social Committee, IMF Managing Director Christine Lagarde said on Tuesday that the IMF made a mistake on Greece and Portugal, and that these countries should have had been given more time to reduce their deficits, reports portuguese Público. Specifically Lagarde said that, for lack of studies, the IMF had estimated the fiscal multiplier at 1 or below when in reality it proved to be about 1.7.