Lagarde throws a sabot into the eurogroupe tank

For the last three weeks, I have been posting and tweeting occasional reminders to those who say “a deal” has been done between Greece and its creditors. My general tenor has been:

1. Greece is in default to the IMF

2. The IMF is not on board with the emasculation deal driven by Schäuble

3. Having been lied to by Schäuble in 2012 about Greek debt sustainability, Christine Lagarde is not about to chuck good money after bad

4. The IMF insists that without debt relief, the Greek situation is hopeless.

I ended The Slogpost of a week ago today with these words: ‘Brussels-am-Berlin is in triumphalist mode for the time being. It won’t last.’

In their haste to use unrepayable debt and technocratic takeover to make an example of the Greeks, the Troikanauts completely forgot their sanctimonious cover-story about lazy and devious Athenians putting the entire world economy at risk.

But Lagarde’s not having any of it.

Last night, an IMF official said the fund would withhold financial support unless it has guarantees Greece can carry out a “comprehensive” set of reforms and will be the beneficiary of debt relief from its European creditors.

I knew this was going to happen: one could see it coming. Most commentators have allowed a false sense of relief to blind them to the IMF elephant in the room. But now the Americans (and it’s a classic example of their MO) are saying, “Your member State owes us money. It’s in default. Time for you to open the wallet and pay the price….we are not a charity.”

The ball is coming over the net, and landing in a court of the unlikely double-act of Draghi and Merkel. But as of now – without a drastic change of heart from the ECB and Eurogrope, the Greece Bailout3 is off.


  1. the mystery to me is this long delay between the deal announced by Tsiparis and the IMF bringing the Krauts back to reality. John you are supposed to tell us WTF is going on behind the scenes?? was this all about humiliating Tsiparis and making Syriza all look like pussies?? Because this sure played into the hands of the Golden Dawn. who now appear not only tough and tenacious but virtuous as well So WTF did the EU just accomplish other than to show themselves up as feeble would be bullies and to make any of their supporters want to desert??


  2. Tsipras is doing exactly what he was supposed to do. The architects of the euro knew full well that the single currency could not survive without fiscal union and the Euro was launched in full anticipation of a crisis, exemplified by Greece, which could then be used to force fiscal union. Greece has already outsourced its monetary policy to the ECB, and now it’s effectively outsourced its fiscal policy to the German finance ministry. Portugal and Italy come next, and then the rest of the political scum will rush to join in.


  3. I should have added, that it is now make or break. I hope that the Greeks opt for break, for all our sakes, but I am not confident.


  4. Dragela’s boast becomes a sabot; well, it’s anagrammatically correct at least. It’s going to take more than rearranging a few French letters to penetrate Draghula’s impregnable defences one would think; a dish like this needs plenty of garlic.


  5. I hope no one here is so credulous as to buy in to the mainstream media reports on the suicidal Lufthansa copilot???

    Trivial cyber-crime for TPTB. A strong hand has Germany in its grip.


  6. To be honest the IMF should not even be there.

    The IMF bailout of Greece in the EZ is the same as the IMF bailing out say Detroit in the USA.

    Lender of last resort is the ECB, central banker is the ECB and the currency is the euro.

    It would be a whole different issue if it was the Greek central bank and drachmas,understandable just like the IMF bailing out the UK and the pound in the 70’s.

    If the ECB closes down and I can wish :-) to halt the rot then the IMF can step in.


  7. I have another thought this is a set up this was all planned some time ago IMF wants Greece to leave the Euro as well as the Krauts so the old squeeze play between Wolfie, Dragula and the IMF which forces a default. . Unbearable pressure will be put on the Greeks. ND and the river and the rest of Syriza will have to go along with this. This is meant as an object lesson to club med


  8. Still haven’t seen/read/heard anything that would suggest that Yankourafakis isn’t anything else but an economic hitman in sheeps clothing (without a neck tie and riding a motorcycle).
    The plan B, hacking, treason story BS, is most likely, given the way it has been deployed, a smokescreen exit ploy.
    Could you get anymore dramatic?
    Suppose you could if “your hotel chambermaid” made an accusation against you and you were then forced to abandon your position as the head of the IMF.
    Why TF should I accept anything that is presented to me by Y?
    He has not ……………… nevermind


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