Yesterday’s mind-blowing piece from Ambrose Evans-Pritchard at the Daily Telegraph may not have reverberated around the world just yet, but it should. The article not only features a coruscating condemnation (by its watchdog the Independent Evaluation Office – IEO) of the IMF’s actions in relation to ClubMed austerity, but also an apology from the IMF board and Lagarde herself for the appalling suffering inflicted upon Greece, and the level of mindless collaboration with mad EC debt policy involved.
The News
The IEO report finds that the whole approach to the eurozone was characterised by “groupthink” and going native with Brussels. They had no fall-back plans on how to deal with a multinational currency crisis, because they had “ruled out any possibility that it could happen”.
In Greece, the IMF signed off a “bail-out” in 2010 – even though it made the sovereign debt impossible to sustain, and many commentators (this one included) insisted from the start that it was mathematically doomed. To go along with the imposition of austerity on top of this was, quite simply, economic illiteracy.
The killer punch – delivered by Evans-Pritchard, a globally respected writer on fiscal economics – is staggering in the clarity of its accusation:
The ramifications of these findings should have colossal ramifications on literally dozens of dimensions.
What the IEO Report means
- For Greece, a clear and documented case for repudiation of the debt in an International Court
- For Brexiteers, a vindication of the moral case for leaving an EU that behaved with selfish and almost unthinkable cruelty from Day One
- For Christine Lagarde, a humiliating admission that she simply did not do her fiduciary duty at the IMF. Her position as head of the IMF must now be in doubt
- For British MPs and the Whiteminster establishment, a sense of shame that – in the light of this obvious international crime – they sat on their hands and whistled a happy tune
- For the Obama Administration’s Tim Geithner, a confirmation of the charge levelled against him at the time: that he used Lagarde’s Amerophilia and French nationality to advantage in pushing through her appointment to a job for which she had no qualifications
- For emerging nations, rage at the highhanded and devious manner in which stimulus that should’ve gone to their economies was blown in a fruitless excercise in debt management designed to keep over-leveraged Western banks upright
- For the Berlin austerity school, a slap across the face and a recognition of its bigoted approach to the problem.
- For the European Commission, charges of collaboration in a hare-brained attempt to save an idiotic currency union
- For the key members of the Eurogroupe and the infamous Troika, possible prosecution for the way they bullied Greece to set an example to others
- For Mario Draghi at the European Central Bank, possible prosecution for the illegal use of EU funds to destabilise the Greek banking system…the same charge applying to his toady in Athens, Yannis Stournaras
How to stop this happening again
In the short term, we probably can’t: there are bigger clouds boiling on the horizon that will rain on the globalist SuperState parade, come what may.
But beyond the Crash2 that creeps ever nearer, the world of States, fiscal policy, multinational banks and global trade alliances needs to given a serious reality check:
- The neoliberal ‘light touch’ regulation of lending at all levels should be abandoned in favour of highly-paid forensic watchdogs with the talent and power to stop limits being exceeded
- The role of Goldman Sachs in this venture should be revisited vigorously by the forces of law and order on every continent: “setting aside fines” will no longer cut it…miscreants must go to jail and serve real sentences, not token knucke-raps
- The euro needs to be radically restructured or abandoned if disasters to make this one look like a minor event are to be avoided
- Above all, widescale debt relief should now be brought in and enforced throughout Club Med
- The European Commission and its power structures need to be investigated by the top brains available in forensic auditing and the Law
- The Eurogroupe and the ECB in particular must be made accountable to a directly elected European Parliament, and forced to act within the spirit and letter of the Treaty of Lisbon
- The manic, blind drive towards federalism should be abandoned: it has been a classic case of trying to sprint while still a toddler. The EU should go back to being the EC.
The situation in Greece today is that of an unelected group of userers telling the democratically elected Governnment of Greece what to do. In the light of the IEO revelations, no ethical group of civilised nations can stand by and offer no restitution for what the largely innocent Greek people have suffered.
International relief without strings but with very heavy regulatory control should be forthcoming for all of ClubMed, and Greek poverty made a priority.
Everyone is vvery keen thse days on War Crimes tribunals. I think we need to instigate some Peace Crime investigations.
But I’m not holding my breath.
The Slog archive on Greek debt & the IMF
The IMF and the Eurogroupe, 2015
The IMF and Greek democracy, 2012
Greek debt and EU politics, 2011
Greek debt and Eurobank lies, 2011
The Slog 