EU plans to launder national central bank money into IMF for bailout lending

“Nerr, wait…ah kern explen ever’sing…”

Dear IMF: Bank error in your favour, collect 200 billion euros.

Update 18:32 GMT: US Republicans plan to block IMF scam

As Chancellor Merkel carries on refusing to compromise about anything ever again, the sleight of hand about how bailouts, pay-backs, and forgiveness are created has begun bigtime. In yesterday’s post here, I opined that ‘making the dizzying spectrum of funds, mechanisms, methodologies and leveraged liquidity so confusing, ordinary people give up in bafflement and go, “Yeh whatever”’ would be at the centre of last desperate attempts to save the eurozone. So it has proved: and Schauble has now enlisted Mario Draghi’s help in a bit of fascinating subterfuge.

The developing Big Idea now contains a new element: the 17 central eurobanks under ECB tutelage will, effectively, give the IMF 200bn euros….to be loaded into the bazooka that, so far, 0% of the world has leveraged up. This is just moving the chairs around for decency’s sake: national central banks would recycle funds through the IMF, potentially to provide lending programs for Italy or Spain, the two countries judged by some to be the most vulnerable at the moment. Central banks do not exist to pull this kind of stunt: it is the start of a slippery slope. And as at least some central bank funds are supplied by taxpayers, it is on example of crafty tax-manipulation to find the money….for the euro must be saved!

If you add it to the 500bn euros in the EFSF, and the amount already committed by the IMF, it is – with yet to be determined other stealth taxes I reported on earlier in the week – enough to realise the Schauble Plan – ie, debt forgiveness and bank forgiveness.

The tricky problem of how to disguise what’s being done remains. If this IMF scam is anything to go by, it won’t be subtle. But given that 95% of folks (quite rightly) don’t give a stuff, it won’t have to be.

Still, you can’t beat the Portuguese for being straightforward: six of their banks just agreed to make up the Government’s deficit for this year by giving them a ‘one-off’ payment. This must be the same one-off payment they gave the Government last year. Oh what an odd place the eurozone is.

26 thoughts on “EU plans to launder national central bank money into IMF for bailout lending

  1. I have said it before and I’ll say it again, there are NO depths to which they will not plumb to achieve their aims. They are morally bankrupt in every sense, it seems to be par for the course to be the lowest of the low to want and be a politico. I truly loathe them all for their greed, and contempt and for us, continuing to keep their snouts in the trough irrespective of what’s going on around them. Hanging them would be too good for them, they need to be made to live an honest life, that would truly be a punishment for them.

  2. I “nicked” this from the DT the other day but I still think it applies.
    “Although welcome, this arrangement can only be a short term palliative to the banking crisis developing in Europe which is linked directly to the area’s sovereign debt debacle which in turn has its roots in the unsustainable economic model foistered on countries by the single currency.”

  3. The EZ difficulties are reminiscent of Slater,Walker(1974) trying to takeover Hill Samuel,then privately admitting to the Old Lady that it was bust,reappearing under a new name,Britannia Arrow,and being broken up finally by a retired Europhile politico,Geoffrey Ripon.

  4. Is there any precedent for the IMF to supplement its available resources by borrowing a vast sum of money from a bank, a central bank or any other bank; which money is to be used for a narrow purpose specified by the bank, in this case to assist distressed eurozone states?

    And would that be allowed under the IMF rules?

    And isn’t there some general principle of law that a principal, in this case the ECB, cannot circumvent a legal prohibition to which it is subject merely by operating through an agent, in this case the IMF?

    And wouldn’t the ECB Statute mean that the ECB would have no lawful authority to engage the IMF as its agent for this purpose?

    And so wouldn’t there be questions about whether any such agreement between the ECB and the IMF would be valid?

    And in theory couldn’t it end up with those running both the ECB and the IMF being held personally liable and being exposed to both civil and criminal prosecution?

    Oh, no, I suppose not: as David says above, illegality doesn’t seem to matter these days, in fact we even have Telegraph editorials demanding illegality.

    • @Denis Cooper

      The personal responsibility of those in charge is something I would applaud. Not only for the ECB and IMF, but the bosses of several major banks too.

  5. “Still, you can’t beat the Portuguese for being straightforward: six of their banks just agreed to make up the Government’s deficit for this year by giving them a ‘one-off’ payment. This must be the same one-off payment they gave the Government last year.”

    No – I don’t think so – I think this is all the money in the pension funds.

    Are you thinking of Spain raiding its pension funds last year? Or Capt Bob?

    J

    • Actually, last year it was Portugal Telecom asking the government to handle all its funds (so cannot be repeated).

      This year, four banks have asked the government to use its expertise on all their funds (so cannot be repeated).

      Given the wonderful management obviously shown by the Portugese government that has enticed so many peension funds under their control, perhaps you are right and others funds will want to ensure similar levels of returns for their pensioners in coming years?

      J

  6. It has been clear, on this blog, for several months. We might as well just give the French what they want (looty), it would certainly save a lot of time. If only this country was half as active as  pushing our self interest forward. 

  7. Cameron has become a side issue for sure,are we pushing OUR interests re “reapatriation of powers”?,are we hell as like.We just get a meek “this is not the time for that” excuse.Meanwhile the Germans throw him a red herring which he swallows whole.The financial transaction tax,which the Germans never has any intention of implementing,but has proved a useful trading chip to divert any real threatening UK demands for more autonomy.

    Well excuse me but this is the PERFECT time to ask for a return of more powers(not that Cameron really wants that).

    Would Sarkozy miss such an open goal?

    Cameron is a patsy.

    • Oldasiahand and kfc1404.
      Patsy definition……..

      1.a person who is easily swindled, deceived, coerced, persuaded, etc.; sucker.
      2.a person upon whom the blame for something falls; scapegoat; fall guy.
      3.a person who is the object of a joke, ridicule, or the like.

      I think it is perfect ; )

  8. And it’s all money down the drain, as the Greek & Italian voters will never accept the austerity programmes. Even if they did, the programmes would run into the sand in the bureaucracies.

    • Yep, providing he doesn’t commit any crimes, he’s also given protection against civil claims for damages. Just like King at the BoE or Greenspan & Bernanke at the Fed, Cameron at No 10. Or my favourite Fat Larry @ US Treasury.

      Why shouldn’t EU mandarins get the same protection as national mandarins or sporting body mandarins. The reason people notice it is because EU mandarins operate much more in the open, than do the Whitehall kind, who hide behind Official Secrets Act etc.

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