Sunday, 31 July 2016

IMF admits disastrous love affair with the euro and apologises for the immolation of Greece


Key paragraphs from the above article listed below.  The story here is just how corrupt the IMF is, and just how complicit with European Union corruption it chose to be.

I always knew why Project Fear was so desperate, but I didn’t appreciate the depths to which it was so desperate.  The story represents a height of cross-institutional corruption that Project Fear - the Remainaics - were keen to preserve, necessarily at the expense of the people.

Remember that the European Union carved out the useful and honest bits of accounting standard IAS 39, so that financial liabilities need not be recorded at fair value.  Useful for dodgy banks, no? (especially state-sponsored banks)  This helps put the IMF’s position (and that of the EU) into context.

"The International Monetary Fund’s top staff misled their own board, made a series of calamitous misjudgments in Greece, became euphoric cheerleaders for the euro project, ignored warning signs of impending crisis, and collectively failed to grasp an elemental concept of currency theory."

" “Before the launch of the euro, the IMF’s public statements tended to emphasise the advantages of the common currency," it said. Some staff members warned that the design of the euro was fundamentally flawed but they were overruled.

“After a heated internal debate, the view supportive of what was perceived to be Europe’s political project ultimately prevailed,” it said.  This pro-EMU bias continued to corrupt their thinking for years. “The IMF remained upbeat about the soundness of the European banking system and the quality of banking supervision in euro-area countries until after the start of the global financial crisis in mid-2007. This lapse was largely due to the IMF’s readiness to take the reassurances of national and euro area authorities at face value,” it said."

"In Greece, the IMF violated its own cardinal rule by signing off on a bailout in 2010 even though it could offer no assurance that the package would bring the country’s debts under control or clear the way for recovery, and many suspected from the start that it was doomed.  The organisation got around this by slipping through a radical change in IMF rescue policy, allowing an exemption (since abolished) if there was a risk of systemic contagion. “The board was not consulted or informed,” it said. The directors discovered the bombshell “tucked into the text” of the Greek package, but by then it was a fait accompli."

"While the fund’s actions were understandable in the white heat of the crisis, the harsh truth is that the bailout sacrificed Greece in a “holding action” to save the euro and north European banks. Greece endured the traditional IMF shock of austerity, without the offsetting IMF cure of debt relief and devaluation to restore viability.  A sub-report on the Greek saga said the country was forced to go through a staggering squeeze, equal to 11pc of GDP over the first three years. This set off a self-feeding downward spiral. The worse it became, the more Greece was forced to cut – what ex-finance minister Yanis Varoufakis called "fiscal water-boarding"."

"The injustice is that the cost of the bailouts was switched to ordinary Greek citizens  – the least able to support the burden  – and it was never acknowledged that the true motive of EU-IMF Troika policy was to protect monetary union. Indeed, the Greeks were repeatedly blamed for failures that stemmed from the policy itself. This unfairness – the root of so much bitterness in Greece – is finally recognised in the report."

No comments:

Post a Comment