This is a stupendous story. Possibly for the first time in its tainted history, the International Monetary Fund had a major change of heart and tried to do the right thing by a ‘program’ country, only to be turned down by that very same country’s finance minister!
The summer of 2012 had just ended and Greece was, once again, facing a ‘funding gap’; a euphemism by which to cover up for the fact that, unsurprisingly, the bankrupt Greek government’s insolvency had not been addressed by new gigantic loans and fresh income-sapping austerity. Around that time, the IMF’s Ms Lagarde was being put under pressure from non-European member-states of the IMF to stop lending more money to Greece until and unless Germany and the European Central Bank came to their senses and accepted the simple premise that Greece’s solvency could only be resolved through a deep debt restructure (or, alternatively, by an enforced exit from the Eurozone).
Ms Lagarde was, in this manner, encouraged to ‘take her leave’ from the European club and to enter the Eurogroup meetings during the latter part of 2012 confrontationally, and with an aggressive agenda of restructuring Greek public debt. Alas, there was a snag: The Greek government, the main beneficiary of the IMF’s change of heart, was unwilling to forge an alliance with the IMF, disinclined to imagine the very possibility of siding with the Washington organisation against the mighty Mr Schäuble. Here is an extract from an article by Peter Spiegel and Kerin Hope from yesterday’s Financial Times:
“Indeed, Mr Stournaras said he bucked pressure from Christine Lagarde, IMF managing director, and Poul Thomsen, the IMF’s Greece mission chief, to ask other eurozone leaders – including German finance minister Wolfgang Schäuble – to accept “haircut” losses on their bailout loans. “Poul and Lagarde said I had to [stand] by their side,” he recalled. “I said: ‘OK, but if I come by your side, it is what would really help Greece, but it’s something which is totally out of the question.’ Schäuble told me: ‘Yannis, forget it.’ So it cannot be done, so what can I do?””
Never perhaps in the history of the European Union has a better example seen the light of day of the complete and utter subjugation of proud nations to the tyranny of the leading surplus nation. Never before have we had such a vivid confirmation that the European Union is no longer an association of sovereign nations and that a rational debate is ruled right out. Think about it: