BREAKING ANALYSIS: The full story on why Christine Lagarde is pointing her cannons at the EU creditors


A majority of informed folk accept that the IMF is a thinly-disguised agent of US foreign policy.

But the IMF actions taken over the last five days don’t fit that picture. So this makes my nose for a story twitch: why does Washington seem to be firing scud missiles at its own State Department by letting Christine Lagarde carpet-bomb the EG/ECB creditors in the media?

It is giving me nasal twitch at the same time as another aspect of the IMF/EU interface about which I tweeted somewhat ironically on Monday and yesterday: Greece is now in cast-iron double-default on its IMF loans, but there doesn’t seem to be any panic about insurance and derivatives. I do know why (all the private banking and Hedgie creditors walked off with their profits a long time ago…what’s left now is central bank/IMF/QE funny-munny) but as Troika2 has been trying to obfuscate that fact in recent times, why is it suddenly relaxed about it becoming obvious?

I suppose one would say, “because the game’s over and the eurogroupe has its victory in the bag, so they don’t care”. I’d say that’s careless: next time around, the Italian Tsipras is going to play a much smarter game given that public knowledge.

The eurogroupe in general and the Germans in particular are, predictably, letting things go to their heads. After the facing out of Italy, it’s probably going to be France’s turn to face the wheelchair-powered ball of bile. Sources close to the eurogroupe have been mouthing off for some weeks now about how much Schäuble took pleasure in refusing to countenance French mercy pleas on behalf of the Greeks. Last week, an EC-based British source told The Slog that the German finance minister’s primary motivation for crushing Tsipras was to ensure that France got the message: you’ve taken the piss for thirty years, but now it’s over.

Christine Lagarde is, of course, French.

There is already bad blood between Schäuble and Lagarde: in 2012, the German lied to her about making Greek repayment sustainability the focus of EU fiscal policy: she has watched as this unpleasant and perfidious man has done the opposite. The latest demands upon Greece – spearheaded by Berlin – seem to have convinced her of his real intentions.

If Schäuble decides to go all out for France, then Lagarde will be in the Dock: for she was Sarkozy’s economics Minister at a time when Wolfie was already muttering in private that there was no sign at all of the promised French austerity. As a Frenchwoman, she can discern the attempt to finally reduce France to an also-ran player in a German run EU. And as a dictatorial control freak, Schäuble will be given the opportunity to humiliate a lending player he never wanted in the ClubMed subjugation championships anyway.

There is but one other threat that both Schäuble (and Weidemann at the Bundesbank) detest in terms of his QE-style approach to solving the eurozone problem: the man at the top of the heap, ECB boss Mario Draghi. When Italy’s turn in the tumbril comes – almost certainly before France – Wolfgang Schäuble will get his opportunity to flush out some of Mario’s darker secrets about Italian fiscal lies and Monte Del Peische when he was heading up the Italian Central Bank.

Frankfurt and Berlin have never forgiven Draghi for the way he pushed every German fiscal opinion out of his way four years ago. Wolfie will have his revenge…he hopes.

It is the way this spiteful US-vassal spy both works and thinks: all the people in the way of his sole control of a German dominated FiskalUnion must be smeared and removed. The US and Berlin did everything in their power to keep the neoliberal Sarkozy in position…and they will do anything to ensure the one European State they own lock stock and barrel calls the shots on their geopolitical behalf.

DSK was fitted up, Hollande’s debt yields were bombed, and next it will be Draghi’s turn to fall from grace. After that, Lagarde will be buried under a mountain of fiscal and lending incompetence both in the Elysée and at the IMF.

Or at least, this is how the course pans out in Herr Schäuble’s vindictive little mind: a Europe controlled by an American-run Germany, an ECB run by Jens Weidemann, and the purse strings power all in Wolfie’s own grasping hands.

This is why Christine Lagarde has declared war on the eurogroupe creditors. She is a devious and divisive airhead, but I can’t help wishing her luck. How appallingly depraved the world is when she is my best bet for a howitzer hit on the Berlin tank. But even that depends on whether she has the confidence of a lame-duck US President who once promised so much.

57 thoughts on “BREAKING ANALYSIS: The full story on why Christine Lagarde is pointing her cannons at the EU creditors

  1. A case of, my enemies enemy is my friend? I wish her luck, she’s going to need it, Wolfie is on a roll. She’s not a patch on DSK and they stitched him up like a kipper. Personally I think it’s more likely the beginning of the end for our Chrissie..


  2. Hollande and the German/French ‘ couple’ . Hilarious ; France seems in awe of Germany now , de Gaulle must be turning in his grave .
    Not sure Schaueble is as vindictive as you claim , he is just being very .. well .. German .There is no grey in Germany , only Black and White .


  3. The IMF is a fraud .. Greece was bust and unable to pay in 2010 .. anyone , and I mean literally anyone with an IQ of 100 and a PC could work that out , you didn’t need 200 economists to see that. This ‘ debr write-off ‘ spiel discredits them hugely as it just serves to highlight their incompetence . speaking of which , the Ratings Agencies upgreded Greece in 2014 …….


  4. The refusal of the IMF to remain as part of Troika unless a serious term elongation is given is a defeat for Schauble’s plans. The International Monetary Fund has sent a strong signal that it may walk away from Greece’s latest bailout programme, arguing that it will not be able to participate if European creditors do not offer Athens substantial debt relief. This again raises pressure on Germany, which has opposed any debt relief.

    The European Commission has submitted a formal proposal to use an EU-wide rescue fund to rush aid to Greece to ensure Athens does not default on Monday.

    Meanwhile, economists remain sceptical that the EUR86bn agreement, which has ensured that Greece remains in the eurozone, will be enough to restore it to good health. (FT)


  5. And while all this is going on the Ukraine Junta is increasingly under threat from the Right-Sector uprising. The first sign of this happened an hour after I published yesterday’s post in EU: ramshackle empire. All the neo-nazi units have joined forces to oppose the Junta. I will be publishing the next episode of this later today.


  6. Looking increasingly likely that the dusky dude is using the IMF as an instrument to force a change of direction in Germany. The possibility that the IMF will refuse to participate otherwise is high. Once Germany has been leaned on sufficiently then the other muppets will fall into line.
    There`s a long way to go before the fat lady clears her throat. Interesting times …as the Oriental curse would say.


  7. Odd that most of humanity have respect and are CONTROLLED by elite nutters who have no regard other than for money and power.

    Others have other interests billions of miles away, truly it’s an odd world. Bit drunk by the way.


  8. Ah, ‘the Eurogroupe in general’. Greece is bankrupt, and France, Italy and Spain are heading that way. So , the loser in October is Germany,faced with worthless IOUs in the ECB. The problem is that our German friends have clearly not studied how a small island and its central bank managed an empire.


  9. william – do you not think that the planned asset stripping of a sovereign nation (“they’re nice islands – we’ll have them. Lovely nationalised industries – they’ll go nicely with what we’ve got lined up for Italy .. Wot else you got tucked away, squire?) will more than compensate the burgeoning German Empire for any small inconvenience it may temporarily experience with Greece’s dodgy IOUs?


  10. Germany is going to end up running Europe, I’m sure that they are only using Brussels as a semblance of a governing body. Can you imagine what Merkel/Schauble really think of the likes of Drunker and Dieselboomer, classic examples of useful idiots I think, once Germany has ‘whipped’ Europe into shape I’ll bet the likes of that lot will be shot out of the door. (I know they should just be shot and done with it.)
    Has this all been at the back of Germany’s mind all along, to rule over Europe, with Washington’s support and approval? A German run Europe with Washington pulling the strings?


  11. According to Greek media, Hochtief, the German company that runs Athens airport, is being considered as the biggest tax evader in Greece.
    The company has appealed several times to Greek justice that it is VAT-free citing “special arrangement.” Hochtief’s appeals have been turned down by the Legal Court of the State.
    “Together with other outstanding payments, like those to social security funds, it might have to pay more than 1 billion Euros,”


  12. Would that have been because we practised the old fashioned, draconian, and oh so (self) limiting principle of fiscal responsibility, william? Cue howls of protest…


  13. Perhaps the United Mistakes of Amurka has spotted, doh, just how bad for business foreign relations the situation has become. Good cop or dog eat dog? Probably both.


  14. And meanwhile immigrants from Africa, Syria and the rest continue to pour into Germany. Some german towns have become ghettos………………and in the south the right wing mob are muttering. Has Mutti not yet noticed the uneasy shifting in her backyard?


  15. Hockthief, how very appropriate. The Greeks should impose as much tax on these confiscated infrastructural companies as possible, together with substantial penalties. Bankrupt the b*stards and force them to be returned. They would need to be a sovereign nation with enough political will to do that though, and the confidence to try a few tricks of their own. Fighting fire with petrol doesn’t seem to be working but there are other, more effective, liquids; p*ssing all over their ‘creditors’ would be a good start!


  16. Backtrack a few months, the one to one meeting Merkel with Putin, the one to one meeting Merkel to Obama.
    Obama now realises he was hustled re the Ukraine and the Russians.
    So Merkel needs taken down, and who will do it ….well up first the IMF who have a billion and one good reasons to,do so.
    Greece is the neighbours back yard the big players are practising in whilst we wait for the big game in Europe.
    And what of the UK, … Well …. The special relationship of course.
    And when it comes to Italy, Spain or Fance ….. History always comes into play.
    Oh how I love my sterling !


  17. If you believe Varoufakis account – & it does sound credible as an explanation for the fiasco – I guess it was those airy-fairy socialists who had no balls or plans to fight the battle.
    “Oh lets ask the people if they want to fight the war.
    Huh – we won the referendum?
    Who ordered the guns? Did nobody think of ordering guns?”

    HL: You must have been thinking about a Grexit from day one…

    YV: Yes, absolutely.

    HL: …have preparations been made?

    YV: The answer is yes and no. We had a small group, a ‘war cabinet’ within the ministry, of about five people that were doing this: so we worked out in theory, on paper, everything that had to be done [to prepare for/in the event of a Grexit]. But it’s one thing to do that at the level of 4-5 people, it’s quite another to prepare the country for it. To prepare the country an executive decision had to be taken, and that decision was never taken.


  18. Hiero
    Quite so. Hochtief means ‘Highdeep’, an invented word which smacks of the oxymoronic nature of multinationalism. “We’re a sort of superficially low-hanging bottom feeder with a topline in high depth.” All very Pythonic: why be old when you can be young? and so forth.


  19. Given that the IMF represents 188 member countries with 2600 staff in Washington DC….managing $360 billion …
    IMF are serious players …
    Total quotas: US$362 billion (as of 3/13/15)
    Biggest borrowers (amount outstanding as of 3/13/15): Portugal, Greece, Ireland, Ukraine
    Biggest precautionary loans (amount agreed as of 3/13/15): Mexico, Poland, Colombia, Morocco
    The IMF’s primary purpose is to ensure the stability of the international monetary system—the system of exchange rates and international payments that enables countries (and their citizens) to transact with each other.
    Parochial rivalries ? No.


  20. Cue the Ankh Morporkian National Anthem:

    “When dragons belch and hippos flee
    My thoughts, Ankh-Morpork, are of thee
    Let others boast of martial dash
    For we have boldly fought with cash
    We own all your helmets, we own all your shoes
    We own all your generals – touch us and you’ll lose.

    Morporkia! Morporkia!
    Morporkia owns the day!
    We can rule you wholesale
    Touch us and you’ll pay.

    We bankrupt all invaders, we sell them souvenirs
    We ner ner ner ner ner, hner ner hner by the ears
    Er hner we ner ner ner ner ner
    Ner ner her ner ner ner hner the ner
    Er ner ner hner ner, nher hner ner ner (etc.)
    Ner hner ner, your gleaming swords
    We mortgaged to the hilt

    Morporkia! Morporkia!
    Hner ner ner ner ner ner
    We can rule you wholesale
    Credit where it’s due.”


  21. The reason that executive level decision was never taken is that in twofold. first Tsiparis’s coalition was based upon airy fairy ideals that if all the socialists get together and just hold hands and say “Ommmmm” that the banksters would relent and social nirvana would bloom. the socialists who did not believe in those fairy tales the KKE weren’t buying that crap and Golden Dawn proclaimed it as a fairy tale from the beginning. The reason No one is writing about Golden Dawn right now is that the las thing the powers that be want to do is remind the public about GD and Gd is quietly recruiting ad preparing for an EU ordered crackdown. They have assets overseas wherever there is a Greek diaspora.
    the touble is the powers that be no this also and unless Tsiparis sabotages the Presidential vote I suspect ND and ” the river to go along with whoever he proposes for that office, because the absolute last thing the Eu wants is another Greek election next January, So my prediction is to look for fireworks next year about this time


  22. Germany must be included in this group of the bankrupt. DB is being kept up like hot air in a balloon. It has bets (that have gone bad by percentage) that exceed the world GDP. BUBA has them backed with nothing. The question about the Germans reverting to creating vassal states is fair, because you can see it in real time. Sleep with one eye open, it may give you enough time to run away. The menace rears its ugly head again, this time run by a mutti. The non threatening old woman that will gut you before you can say no to the biscuits. There is a lot of this going around, LaGarde, Clinton, Yellen, Mary Jo White. They have resorted to asking if gram could be the face of evil. Yes, tell them yes.


  23. Ruxley OAP … you reminded me of a song which I heard sung by some betrunken Aussie riflemen many years ago. To the tune of Deutschland Uber Alles it went something like:
    “Life presents a dismal picture
    From conception to the tomb.
    Father’s got an anal stricture,
    Mother’s got a fallen womb.
    Sister Sue has been aborted
    For the twenty second time – (second time).
    Brother John has been deported
    For a homosexual crime” …

    I sang that once to my German girlfriend of the time as we drove over the border near Aachen . I regret to have to report that a considerable froideur ensued and lasted nearly all the way to Rosenheim …


  24. @ Phaedrus

    Posted at 22:43
    More from Ms Constantopoulo. She says the vote in parliament is a “very black day for democracy in Europe”.

    “Through blackmail the parliament is asked within two-and-a-half hours to bury the parliamentary operation, to put a mortgage on public assets, to sell it away,” she adds.

    That’s my girl.


  25. Draft legislation becomes daft legitimisation and the straightjacket is taken on approval in the full knowledge that the garment is unwearable. This is a fashion that can only cripple all those who try to follow it.


  26. Something about this EU/IMF bunfight does not compute.
    The IMF is Washingtons pawnbroker /loan shark /extortioner. Modus operandi is to issue unsustainable debt to a Sovereign country , and then foreclose ,using privataziation as a means to loot and plunder in favour of US Corporations and financiers.
    Germany, the strongest economy in the EU, calls the shots as regards EU financial policy and uses strong-arm tactics as required to enforce that policy.
    Germany is the main EU Vassal state of Washington and is an occupied country with many US army bases. Merkel does not break wind, without consent from Washington.
    The EU is an original Washington construct to maintain a standing army in Europe under the umbrella of NATO and using the Euro as a leash to control these disparate countries.
    The raison d’etre of NATO no longer exists. The Warsaw pact armies de-camped from Europe in 1991 and demobilised.
    The Military/ Industrial/Financial complex is reluctant to disband NATO, because of its pork barrel budget of approx $400 billion. They must seek a bogey man to maintain the charade of Russia as an enemy of Europe and about to invade. Schoolboy nonsense, and the MSM is compliant in planting news stories to maintain this state of tension.
    They are screwing with our heads, Distraction,deceit ,switch and bait. These Washington /EU clowns could not lay straight in bed.
    ‘Something is rotten in the state of Denmark’ (Hamlet)


  27. I’ve always seen the IMF as another of those ‘useful idiots’ so sometimes they get off track.
    I agree about the usual end result of their activities, but don’t think the ideological tools working there have that in mind.
    That’s why they had to get rid of Strauss-Kahn, because he actually had some brains.


  28. Zerohedge has a good headline. July 5 Greek Independence Day; July 15 Greek In Dependence Day. They surrendered at 1am with Varoufakis voting against. Tsipras has lost his majority.

    Wonder how long it will take for people to wake up to the coming bail-in on the remaining deposits? And is anyone watching to see when the 112.5 tonnes of gold held by Greece goes to Frankfurt? After all the Fed can’t return the gold that Germany has asked to have back as it’s probably disappeared elsewhere.

    The sale of the remaining state owned assets to the lowest bidder will begin. Not the first time but what happens when the cupboard is bare? At the core of this whole situation is the level of corruption that’s brought a sovereign nation to its knees. Richard North has done a good job of listing a lot of the corruption he was investigating 10 years ago. It runs into billions. Death threats and people he talked to going missing permanently brought a halt to it. And now the Greek people are on the hook for another 86m euros….until the next ‘beneficial’ crisis.


  29. Were Chrissy and Baz not working together at a law firm in Chicago that specialised in derivatives?
    The idea that France will become a vassal of Germany and so the USA has to be a fantasy.The French held out in their own way against invaders in the past,the new invaders will be equally stroked and choked by their own bile by the time France has decided to let them go.I think the Empire should beware of French maidens carrying handbags but perhaps hopefully not!


  30. OTT and in the ‘good day to publish bad news’ tradion the US downgraded their GDP forecast for 2015 by a massive 1% from 3% to 2%, that is about a 1.7 Trillion $ drop in output.

    This comes from zerohedge timed 18.00 local time 15th july 2015.

    This is more than a noise adjustment.

    In sheer scale this dwarfs Greece’s annual current GDP by a factor of over 10 times I believe.

    As with all make believe forecasts the forecast for next year remains at a 2.9% growth figure, albeit from I presume a lower base figure (I actually believe that the compilers know that the 2016 forecast is pure guesswork so why not keep it same as before?).

    In global trade terms this revision shoild be of great import or has the fantasy market environment got schills at the ready to parrot that the market has ‘already priced this in’?


  31. France just wants respect … as a former ‘great power’. France is in no position to demand anything else except fine clothes and honorary titles. Not very deep down, they know it.
    -a long bit overdue, but UK in a similar position. We’ll soon be asking for conferences and summits to be held in London, and beg that we get to chair the proceedings. Of course, until then we have our special relationship (finish sentence any way you wish) as events pass us by.


  32. Chrissie’ term at the IMF runs out in 2016. Mark Carney is elibible for his UK passport in 2016. As a ‘European’ he could be the first Brit to head the IMF. While I have great respect for him, he is also ex Goldman Sachs.


  33. When you read the Richard North investigative piece you can only think that the Eurogroup and the germans in particular are ‘turning a blind eye’,’ sweeping under the carpet’ and ‘burying the bad news’ of historic corruption within the now defunct Greece nation with the aim of pushing the project forward for full political and fiscal integration?


  34. I would have thought that any agreement would stop such taxation,however to name them so visitors don’t use them or make them white elephants in other ways,seems fair game to me!


  35. They ignore actual figures & use estimated figures has empirical evidence.the recovery is estimated,fuel at $50 petrol prices rising and 0% inflation,now what’s keeping the economy out of deflation of course profiteering & the destruction of economies that brings! PS wages are increasing,ie 1% for public workers in real terms because the economy is flat lining & they call it a mixed picture?????????


  36. The troika will continue the carnage in Greece until they have sold off every single Greek asset, leaving Greece stripped and unable to recover. Only then will the troika cuts them loose.

    The IMF is a criminal organization whose every employee, past and present, should be prosecuted for crimes against humanity.


  37. why does Washington seem to be firing scud missiles at its own State Department?

    Maybe coz Washington is made up of factions?

    “Meanwhile, competing branches of the US government still engage in Third World proxy wars, in which the Defense Department and its political allies and satellites (the Republican Party, the arms and energy industry, Israel) face off against the State Department and its allies and satellites (the Democratic Party, the NGOs and universities, Europe, Palestine).”

    “However, the suggestion that someone, even the president, is in control of today’s government may be an illusion…
    The growing dominance of the federal government over the states has obscured more fundamental changes within the federal government itself: It is not just bigger, it is dangerously off kilter. Our carefully constructed system of checks and balances is being negated by the rise of a fourth branch, an administrative state of sprawling departments and agencies that govern with increasing autonomy and decreasing transparency.”


  38. And how did this mess begin?. Well it appears that it WASN’T an accident.

    “Will Greece default or exit from the euro, or both? First, I will describe the best
    course of action, then what I think will happen. The two are not the same: In Europe,
    policy actions have diverged from the optimal course of action for most of the last two


  39. TBH It is the only response elites, sovereigns and banksters have to an economic crisis created by such a magnificent level of productive capabilitiy unless you … wait for it … start telling the truth.

    But to tell the truth, the catch and why they can’t is because they took so much knowing the truth leaving many with nothing and there is no way on earth they are ever going to give it back.

    Fema Camps and Jade Helm it is then … you might want to consider an IS expansion also as the poorest are forced to combat the economic actions of aformentioned to keep it all sweet for them.


  40. Big oops 1% drop in US GDP is $170 Billion very definietely not $1.7Trillion , however it is still as though Greece ceased to exist in GDP terms.

    My only excuse is that an OAP moment tookover.


  41. Jerry Reiss’s of the IMF June the 11th interview offered a big clue on how easy it is to balance the Greek economy with 80 % of our GDP spent on wages and pensions. This data was locally censored and Internationally supressed but stayed up on the IMF site for all to see. We spread the word and used Eurostat and OECD data to estimate that our EU fed to a pig public sector is currently costing us 72% of our GDP for its wages and ( very early ) pensions. The IMF had offerd us the obvious solution to the ” Greek problem ” : our electoral size, ( incapacitated and corrupt according to the OECD report ) public sector deserves a long delayed haicut – marine style. But no one picked up the phone – yet. Bad bussiness really.

    Vested interests of the EU persisting in International Media was correctly perceived as a systemic threat by the IMF that doesn’t need another Troikan systemic error, will not accept responsibility for enforcing the banana colony deal permanently rejected by the Greek people in Referendum two weeks ago and will not risk systemic failure for any of the above.

    It is safe to assume Troika is not really there anymore, despite appearances and the system downshifted to balance of power again. Much better than the satanic alliance – isn’t it ? Let’s hope for the best and work for the rest.


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