IMF: Still fit for purpose?

Graham_Devon

he International Monetary Fund’s top staff misled their own board, made a series of calamitous misjudgments in Greece, became euphoric cheerleaders for the euro project, ignored warning signs of impending crisis, and collectively failed to grasp an elemental concept of currency theory.

This is the lacerating verdict of the IMF’s top watchdog on the fund’s tangled political role in the eurozone debt crisis, the most damaging episode in the history of the Bretton Woods institutions.

The injustice is that the cost of the bailouts was switched to ordinary Greek citizens – the least able to support the burden – and it was never acknowledged that the true motive of EU-IMF Troika policy was to protect monetary union. Indeed, the Greeks were repeatedly blamed for failures that stemmed from the policy itself. This unfairness – the root of so much bitterness in Greece – is finally recognised in the report.

The report (and the article) is a long one.

But the main points to take from it is that the Euro project comes before everything else. Greece was, and still is, being hung out to dry. Not only did the IMF break a load of it's own rules on Greece, they refused to open up records and meetings, knowingly delayed finance when it was needed (making the situation acutely worse).

The IMF knew that Greece's debt was unsustainable, however, needed to maintain the idea that it was stable. Therefore, they decided to state that "on balance", debt was sustainable. On balance meaning nothing.

Reports were created outside of reporting framework to avoid having to report correctly. The IEO themselves were unable to penetrate key records, so what's happened to them?

It just goes on and on. The overarching point though is that the IMF and the EU are so intertwined doing whatever it takes to force (and save) the EU project.

Telegraph: article:http://www.telegraph.co.uk/business/2016/07/28/imf-admits-disastrous-love-affair-with-euro-apologises-for-the-i/

IEO report:
http://www.ieo-imf.org/ieo/pages/CompletedEvaluation267.aspx

mayonnaise

Let's not be too harsh on the IMF. We might need them rather sooner than later.

Brexit raises spectre of IMF bailout for UK

http://www.standard.co.uk/business/anthony-hilton-brexit-raises-spectre-of-imf-bailout-for-uk-a3421071.html

A_Medium_Size_Jock

mayonnaise wrote: »

Let's not be too harsh on the IMF. We might need them rather sooner than later.


http://www.standard.co.uk/business/anthony-hilton-brexit-raises-spectre-of-imf-bailout-for-uk-a3421071.html

Ha ha ha ha - desperate times indeed when you need to take excerpts from a book to promote your propagandist POV.
Read the very first comment below the piece in your link - it provides an extremely accurate precis:

A promo publicity blurb is turned into a rant against Brexit. It also betrays a poor understanding of what a transition deal is about.

I posted yesterday about how corrupt the IMF have been widely-acknowledged as being with this link from the year 2000:
https://www.globalpolicy.org/component/content/article/209/42926.html

http://forums.moneysavingexpert.com/showpost.php?p=71795071&postcount=14661

Many accept that the EU must undergo substantial change.
It will be interesting to see how the IMF is affected by what must happen within the EU.

DiggerUK

Don't forget, the IMF is the ultimate lender of last resort..._

steampowered

The whole basis of your criticism seems to be that the IMF lent more money to Greece than its guidelines permitted.

Would you rather, then, the IMF stopped lending to Greece and let the Greek government enter bankruptcy? Would you rather the EU did the same? There were no good options.

I do not like it when Brexiteers such as the writer of that article claim that Greece is being screwed over by the EU. Greece is a sovereign state, thank you very much, and is quite able to take its own decisions. The EU enjoys significant support in Greece. It is very arrogant for UK Brexiteers to claim that they know what is best for Greece with regards to the EU better than the Greeks do.

cogito

steampowered wrote: »

The whole basis of your criticism seems to be that the IMF lent more money to Greece than its guidelines permitted.

Would you rather, then, the IMF stopped lending to Greece and let the Greek government enter bankruptcy? Would you rather the EU did the same? There were no good options.

I do not like it when Brexiteers such as the writer of that article claim that Greece is being screwed over by the EU. Greece is a sovereign state, thank you very much, and is quite able to take its own decisions. The EU enjoys significant support in Greece. It is very arrogant for UK Brexiteers to claim that they know what is best for Greece with regards to the EU better than the Greeks do.

Greece is no longer a sovereign state. It's a debt slave of the EU which cannot agree how to resolve its grim situation. Everyone knows that it needs debt relief or forgiveness but Germany cannot allow either for domestic political reasons and Germany is the country which holds the pursestrings.

The IMF theoretically lent to Greece but the money actually went to the German and French banks which would have gone bankrupt if they had been forced to take losses on Greek government bonds which they foolishly bought.

What the IMF did wrong was to support the Euro to stop it collapsing instead of supporting the individual countries that needed help and that was contrary to its constitution.

The big problem with the IMF is that it's very euro-centric. You only have to look at its previous managing directors to see that. That is why it will have to change and why east Asian countries are looking to set up their own alternative. It's also why the Chinese have accrued massive reserves so that they will never find themselves at the mercy of the IMF.

Graham_Devon

steampowered wrote: »

The whole basis of your criticism seems to be that the IMF lent more money to Greece than its guidelines permitted.

Would you rather, then, the IMF stopped lending to Greece and let the Greek government enter bankruptcy? Would you rather the EU did the same? There were no good options.

I do not like it when Brexiteers such as the writer of that article claim that Greece is being screwed over by the EU. Greece is a sovereign state, thank you very much, and is quite able to take its own decisions. The EU enjoys significant support in Greece. It is very arrogant for UK Brexiteers to claim that they know what is best for Greece with regards to the EU better than the Greeks do.

It's not me who wrote the article, or, for that matter, penned the very long report.

This is absolutely nothing to do with which box you ticked in the referendum either. This was going on way before that. So not sure why you have focused quite so much on "brexiteers" when it's got nothing to do with our referendum.

Whatever your view on whether Greece should continually be bailed out or not, what is very clear is thatthe IMF and the EU should go about it in a transparent manner. The report clearly states that this is not the case and the IMF have had to hide documents and play with words to keep things going...not for Greece, but for the Euro. These sort of things shouldn't simply be brushed under the carpet, whatever way you voted in the UK referendum.

The report simply backs up the case I and many others have made on the Greece thread on here since 2009.

For such a big report with such damning statements, I'm surprised it wasn't even mentioned on the BBC. Was quite big news in France apparently.

Sapphire

Isn't Mme Lagarde involved in the IMF? The very fact that this woman has been let off a prison sentence – just like other wealthy individuals have despite actions that have hurt many ordinary people – appears to point to lack of accountability and corruption in such organisations and among the global financial 'elite'. It's all very alarming and doesn't bode well for the future…

fatbeetle

What do you mean by "still"?