tridentHas the IMF given up on the eurozone?

Despite another media snowjob from Berlin, it is clear that without massive debt relief there will be no IMF participation in Bailout 3. But do Christine Lagarde’s doubts go even deeper?

Some of you may have noticed this, most of you won’t….which is, I suppose, The Slog’s raison d’être – if one is still deemed to exist – viz? the spotting of bollocks zipping under the radar.

Here are my three verifiable observations on the latest Greek Marathon:

  1. The vast majority of ‘mainstream’ Western media seem convinced that a deal has been signed and ratified to produce Greek bailout 3 – which isn’t a bailout, just further punishment, but park that for a minute. In fact, they are quite wrong: although the final, final, final Bundestag vote will probably approve it next Wednesday, THE IMF WILL NOT BE INVOLVED.
  2. For the last (roughly) ten days, the completely unofficial and unconstitutional eurogrope has been putting its spinners to work on – you have to admit it – an amazing job of introducing yet more tweaks, problems and sticking points to keep the emphasis 100% on Greek compliance. At times, when the huge IMF mammoth in the room has been raised by someone, releases go out saying that Christine Lagarde has been mollified by pushing back the time period of the debt. Yesterday, Lagarde scotched that once and for all. THE IMF IS NOT INVOLVED IN BAILOUT 3.
  3. Every time I have posted or tweeted this reality, swarms of know-alls have arrived to tell me I have alles falsch gegotten, and why don’t I keep abreast of events, Gott in Himmel. It’s official: THE IMF PLANS TO REVIEW FURTHER INVOLVEMENT IN OCTOBER, BUT IT IS NOT TAKING PART IN BAILOUT 3.

The vastly improved Guardian newspaper (do enjoy your retirement, Alan) pointed this out in an excellent piece at 20.37 CET yesterday; and at 20:40 pm – three minutes behind but infinitely more definitive and outspoken – the indefatigable Frances Coppola did the same in a contribution at Forbes.

So as the eurogrope Greek protection racket swings the baseball bat once more for luck, I can confirm yet again that this is NOT an official Troika extortion. By all means call it something else – a duodenal ulcer? a duet? Tryannosaurus Duopolous? – but be in no doubt: this time, only two prongs are poking the Athenian buttock.

In reality, there are I suspect two factors inside Mme Lagarde’s head. First, she doesn’t believe either Berlin or its invented creature eurogrope want debt relief, they want Greek assets and sovereignty on a plate, so they can carpetbag the former, and toss the latter out of the eurozone when it suits them: it took Frufru a long time to get there, but better late than never. (To be fair to Chrissie, it took Syriza a long time to grasp this too).

Second however – and perhaps infinitely more disturbing, but predictable – through her still extant connections, Lagarde is party to where most of the bodies are in the EU. She knows how dire things are. And she’s not in the business of throwing even worse money after bad. She may well feel (perhaps she has been told) that IMF money could be put to better use elsewhere. She is probably also aware that Alexis Tsipras has already told the Greek Parliament’s speaker that he wants to book a Confidence Motion at the earliest opportunity.

In the meantime, I remain dejected and angry at the average Anglo-Brit’s willingness to insist on continuing to see this blatantly corrupt heist as something the crooked, lazy Greeks had coming. “Lassen-Sie nach Athens gehen” is what I tend to suggest. Well, that and “f**k off until you’ve read rather more about the timelines, players and medium-term history of all this, you morons”.

Yesterday at The Slog: Roll up roll up for the superdeflation cockfight of the century


  1. I need to know how the 50 extra votes Syriza gets as the majority party are controlled Are these Tsiparis puppets or can they split off and vote no along with GD and presumably KKE


  2. It never ceases to amaze me how eager know nowts are to share their lack of knowledge about Greece and international finance. The IMF has other shareholders too who are aghast at how much money is tied up in Greece considering its’ population size. The gross incompetence of the EZ in 2010 beggars belief and the bill for that has to land at the door of lender of last resort.
    Now the boneheads who designed the Euro thought they could create a currency without a backstop. They seem terribly surprised to find out you can’t, even though every sane economist pointed this out at the time. You can’t crush butterflies on wheels forever.


  3. Lagarde is a figurehead whose 5 year term ends in 2016. Last time I heard an IMF press conference, she didn’t even take questions on finance, passing them over to a colleague. I have no doubt that what she says she has been told to say or says because it is in her own personal interest. The question is by whom.

    ‘She may well feel (perhaps she has been told) that IMF money could be put to better use elsewhere.’ Of course. the IMF’s involvement in propping up EMU has been criticised by the governments of emerging economies for years, on the grounds that too much IMF money is being used to sort out a problem that Europe, still one of the richest parts of the world, should be sorting out for itself. In 2011 the world’s largest developing countries issued a statement declaring that the tradition of appointing a European as managing director undermined the legitimacy of the IMF and called for the appointment to be merit-based. Lagarde may therefore be following the line of the emerging economies in the hope that she is reappointed to a job, for which she was paid in 2012 a tax-exempt and index-linked salary of $467,940 plus an allowance of US$83,760 and additional expenses for entertainment.

    With almost 18% of voting rights, the USA is the most powerful member of the IMF (and opposed to giving the emerging economies more of a say in the running of the IMF). The US’ interest in the bailout of Greece is primarily to ensure that Greece stays within NATO and outside of Russia’s sphere of influence. Lagarde’s recent comments may reflect the US feeling that it has to take a more direct role in securing political stability in Greece.


  4. With the IMF not being on board and not reviewed until October to me implies the IMF realises now it should not have been involved with this in the first instance because it is like bailing out Detroit in the USA whose responsibility is solely the FED and for Greece it should have been the ECB.

    Now it is for those in the EZ to fully adopt a federal republic now with the ECB lender of last resort and tough luck Germany you are in that republic and then like the USA,China or Japan you can print baby, print to backstop your euro. The UK not being in the euro republic needs to cuts its financial obligations into this zone JUST LIKE THE IMF because we should not be paying for it under the next paragraph.

    Oh the UK, maybe not on the CTRL-P just yet, but from what I am seeing as a slowdown on the street it is going to catch up with Carney eventually and putting up interest rates like the coming minimum wage hike is to raise the baseline cost to preserve the Keynes sovereign debt but cuts consumption omce again. This cycle is started because not one region under a central bank actually works economically now they are rotating the population rape-train of QE pretending it adds up.

    The global central banker financial zombie apocalypse is upon now who gets eaten after Greece? It can only be consumed for so long because of the finite size of Greece GDP assets and is Greece enough to pay down 60 trillion in deerivatives value? Nope.


  5. The wolf in the wheelchair is the chairman of the German State owned KfW bank. (Kreditanstalt für Wiederaufbau “Reconstruction Credit Institute”), which has some Eur 15bn exposure to Greek debt.
    I doubt he cares if that loan is repaid by the IMF or other Eurozone partners or by a sale of Greece’s assets.
    Business as usual. Who’s next in line?


  6. By whom, I would have thought that was obvious, the Fed. As to the US having a more direct role, how much more direct than they do already? We all but vassal states to the US.


  7. ChrisB
    During her time as French economics minister, she once made a complete tit of herself by showing she didn’t understand moving annual totals. It was cringe-makingly embarrassing.


  8. Spot on Chrisb.

    Chrissie is running for re-election. The Europeans are not happy with her and she has the almost impossible job of pacifying them as well as the US. She can probably split the Euros since the French will support her. The Germans will have to be dragged kicking and screaming to the table. The US may be willing to accept an appropriate representative from the developing world; say a Singaporean if the right candidate is available. 2016 is Obama’s last year in office and he might be prepared to make such a statement. There is always a compromise and that could be the ‘Brit’ Mark Carney, if he gets his passport in time. He is eligible next year.

    The mismanagement of the Fund has been so egregious over recent years, especially over the Euro crisis, that the Europeans have lost any moral right to the crown. (Likewise the Americans at the World Bank, but, as they say in Merica, that’s a whole nuther thang!)


  9. I should add the Mohammed El-Erian, formerly of PIMCO and ex-IMF, has an Egyptian passport and might fit the bill for both the US and the developing world. The former Rhodesian and Israeli passport holder, Stanley Fischer, a former Deputy IMF Managing Director has probably disqualified himself by becoming Janet Yellen’s deputy at the Fed. There may well be other such candidates that I am not aware of.


  10. The Corbynites (of which I am one, sue me) have finally discovered that the root cause of neoliberal austerity forever is the ceding of the financial system to private banks. It’s time for a UK Greenback, currency not based on debt with interest paid to the banks (and whoever they sell it onto on the markets) forever, but debt free government paper.


  11. Be better if Ms Lagarde concentrated her energies on running the IMF as it was intended. As has been said before ,there are less well off countries ,because of their membership ,on the hook to bail out the Euro.


  12. Money is a financial asset. Financial assets are always without exception backed by a financial liability (called debt by the party that holds this liability). So debt free money is not impossible.


  13. IMF holds about 10% of Greek Debt, by law they cannot write it off, but they can roll it over and not make anymore new loans. The ESM will just have to conjure up what the IMF would have contributed in bail-out 3. As Mark Deacon posted above the iMF should never have gotten involved in the first instance.

    Or maybe only the IMF should have been involved. Then by now Greece would have defaulted, restored its own currency, regained financial sovereignty.and maybe (big maybe) implemented the necessary economic and structural reforms to give the country a sustainable financial and economic foundation.


  14. @johnb wants to know “how the 50 extra votes Syriza gets as the majority party are controlled [,,,]”

    A; I would imagine they are allocated by the Central Political Committee and the factional Secretariats. Whatever else he may be, Tsipras isn’t a dictator. He’s the Syriza leader for similar reasons as BHO is in the WH, he says what the Greek people want to hear, in a manner they want it to be said.


  15. @ desmond. there are misinformation sites like Positive Money in the UK that promote this nonsense. It sucks in genuine people who follow this dead end. The solution is in fact very simple. It’s set out on sites Warren Moslers site. But these sites can’t be heard because of all the misinformation. From sites like Positive Money. But also this repetitious message about the evils of UK Government debt. Without increasing UK Govt debt we will collapse in a heap. All because of a fear of journal entries. That the UK Govt can create when required as required. Unlike Euro countries. That why Greece is captured with no way out. But the misinformation promoters pump out the false scare stories of what will happen if Greece leave the Euro. The scum want to get their hands on Greece’s assets at knock down prices. And to hell with the impact it has.


  16. Pingback: THIS ISN’T GREEK DEAL TIME, IT’S TROIKA GET REAL TIME: The TROIKA IS DEAD | Ελεύθερη Λαική Αντιστασιακή Συσπείρωση

  17. General consensus, last I read, was that the S was expected to HTF first or second week of October.
    So I’d suggest (along with Mystic Meg), that Lagarde’s not contemplating any further IMF involvement with the Greek play at all.
    Where has “Yankourufakis” been recently?
    Job done.


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