"IMF apologises for the immolation of Greece"

[GlennB]

"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. "

"European Union insiders used the [IMF] fund to rescue their own rich currency union and banking system."

"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."

The Telegraph (not a notably left-wing source )

Yeah, just like Varoufakis and a bunch of Nobel Laureates and other economics gurus said at the time Fiscal waterboarding.

If (some) posters can be bothered to read it and take it in then that would be a nice change.

 

[dudalb]

Why are you so obsessed to prove that Greece's problems are due to everything except massive overspending by the government?

 

[Darth Rotor]

"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. "

"European Union insiders used the [IMF] fund to rescue their own rich currency union and banking system."

"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."

The Telegraph (not a notably left-wing source )

Yeah, just like Varoufakis and a bunch of Nobel Laureates and other economics gurus said at the time Fiscal waterboarding.

If (some) posters can be bothered to read it and take it in then that would be a nice change.

Glenn, it's an interesting article, and I'll need to read it a few more times before I can comment on it. The establishment of the Euro, by itself, for any government and nation that joined in meant that one of the tools a government had in terms of letting a currency float or not, or to devalue it, was gone. I am sure that the twenty pound brains at the IMF were aware of that. My first impression is that this is akin to an insider trading scheme, but I'll need to read the article again and look at the Greek economic issues since about 1995. (PS, might this thread not be better off in the Economics sub forum?)

@dudalb: part of their problem was joining the Euro in the first place. (If you are looking for root causes).

 

[Malhia]

The news hides "All of us have to leave IMF."

"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 news is misleading people.
We have to trash this news.
IMF makes us have missed the point of the argument.

The mistake is not that point but the system of Euro in itself.
Just the system of Euro creates big winners and miserable losers.
The nation which has no commercial competitive power always becomes a loser.
Greece should have a system of customs duties.
UK is a winner.
A winner has to support a great deal of money for a loser.
But British support money doesn't go to Greece.
The money is spent for interest payments on debt and goes to IMF .
Then France,which is the home base of IMF, can achieve surplus welfare without working.
UK thought this situation was stupid.
Therefore they leave the Euro.
UK is right.
So, Greece and UK and other nations do not need IMF.

The news hides "All of us have to leave IMF."

 

[fuelair]

Why are you so obsessed to prove that Greece's problems are due to everything except massive overspending by the government?

And high paying, no real output jobs for certain people with influence and loads of the wealthier evading taxes on a huge level with no real effort to collect same. Neither the one you noted or the two I did helped at all!!!!!!!!!

 

[GlennB]

Why are you so obsessed to prove that Greece's problems are due to everything except massive overspending by the government?

Greece's initial problems were due to precisely what you describe, so you're right up to that point. What has happened since then has been geared to what the article says. The Troika should have kicked Greece out but instead knowingly crucified it, for the EU/EZ's benefit. And the IMF knew it all along.

But I doubt you even read the Telegraph piece.

 

[fuelair]

Greece's initial problems were due to precisely what you describe, so you're right up to that point. What has happened since then has been geared to what the article says. The Troika should have kicked Greece out but instead knowingly crucified it, for the EU/EZ's benefit. And the IMF knew it all along.

But I doubt you even read the Telegraph piece.

I thought the Impossible Missions Force were the good guys, by the way!!!

 

[GlennB]

I thought the Impossible Missions Force were the good guys, by the way!!!

They've been touting debt forgiveness as an essential part of the bailouts for some time now, but then getting cold feet when they should have been withdrawing their support. And so everyone keeps digging the hole even deeper.

 

[Jules Galen]

Why are you so obsessed to prove that Greece's problems are due to everything except massive overspending by the government?

But...the Greek Government would have never had that money to spend had the banks not lent it to them with the unspoken promise that their governments would step in to make sure they didn't get a "hair cut" on those loans when they went bad. And everybody knew - even the stray dogs in Athens - knew that the Greek government was corrupt and borrowing money it could never pay back (so that the local politicians could line their pockets)

What happened to Greece was in a small way done to Birmingham Alabama a few years back. It's good reading for getting an understanding as to how the game works - and how Greece was looted.

http://www.rollingstone.com/politics/news/looting-main-street-20100331

 

[Ziggurat]

Greece's initial problems were due to precisely what you describe, so you're right up to that point. What has happened since then has been geared to what the article says. The Troika should have kicked Greece out but instead knowingly crucified it, for the EU/EZ's benefit. And the IMF knew it all along.

But I doubt you even read the Telegraph piece.

If Greece should have left, then why didn't it? Can Greece not decide to leave, ala Britain?

 

[Noztradamus]

Well Greece fires can be difficult to deal with.

 

[Aepervius]

If Greece should have left, then why didn't it? Can Greece not decide to leave, ala Britain?

Because the problem now is that if they quit, the first few years (or maybe longer) will be worst for their economy before getting better. And the first politician to implement it will be hugely unpopular.

ETA: and remember that leaving the EU means also leaving the eurozone and everything behind including freedom of circulation of good and people. All has to be negotiated with the EU. Which for various good or bad reason would have no compelling interest to be generous with greece.

People in Greece probably remember also what hapenned when drachma was devaluated (after all it went from 60 Drachma for 1 euro in 1985 to nearly 250 Drachma to 1 euro in circa 2000 and was devaluated twice). And the one greek person I spoke of (living in germany) reminded me also that 40 years ago Greece was under the thumb of the military Junta, and some *may* fear that isolating itself from Europe may signal a come back of them.

Who knows.

 

[GlennB]

If Greece should have left, then why didn't it? Can Greece not decide to leave, ala Britain?

Leaving the EZ is a different matter but, essentially, yes it could. That would take politicians willing to sacrifice their hold on power though, as the shock of abruptly leaving the Eurozone would be truly dramatic. Tsipras had the mandate to leave in 2015 but lost his nerve at the last moment.

It would make more sense for a managed withdrawal imposed and organised by the EZ/EU but that would require a costly admission of failure and mismanagement by them, which isn't going to happen. Protecting their banks and the € is far more important.

It'll be interesting to see what happens if the IMF (as it should, or even must) withdraws from future bailouts. It's been breaking its own rules all this time and this report has blown the lid off that.

 

[Aepervius]

Leaving the EZ is a different matter but, essentially, yes it could. That would take politicians willing to sacrifice their hold on power though, as the shock of abruptly leaving the Eurozone would be truly dramatic. Tsipras had the mandate to leave in 2015 but lost his nerve at the last moment.

It would make more sense for a managed withdrawal imposed and organised by the EZ/EU but that would require a costly admission of failure and mismanagement by them, which isn't going to happen. Protecting their banks and the € is far more important.

It'll be interesting to see what happens if the IMF (as it should, or even must) withdraws from future bailouts. It's been breaking its own rules all this time and this report has blown the lid off that.

there might also be military factors to take into account, the military backing of greece alone and greece in EU is not the same, which may make the cretes , trukish and macedonian situation more complicated.

 

[Hlafordlaes]

If Greece should have left, then why didn't it? Can Greece not decide to leave, ala Britain?

The cost of the debt would have exploded. A new drachma would have been a very unstable and low-value currency, with demand for it restricted to buyers of Greek exports (few) and tourists. Greeks would then have to buy euros with a potentially constantly depreciating currency, making the debt explode.

Greece has had and still has some wildly crazy practices. Wholesale adoption of all changes required should and could have come along with partial debt cancellation and restructuring. But regardless, as I understand it, debt levels were way beyond reasonable owing to a certain Goldman Sachs misdirect about Greek finances, and to a lack of due diligence on the part of lenders as well. All parties are 'guilty,' not just Greece.

I say give Greece some huge bailouts now to help with the costs of the refugee crisis, using it to chart a better course for both issues. Support for German and French bank debt relief for Greece at this point should play well with their respective publics if sold as compensation for handling refugees who do not reach other parts of Europe.

 

[Francesca R]

Tsipras had the mandate to leave in 2015 but lost his nerve at the last moment.

No he didn't. Greek voters never voted to leave the euro. Rather like the UK brexit camp, Tsipras/Syriza offered an impossible ticket of "Don't repay Angela and Christine yet stay in the euro".

The referendum in 2015 was about rejecting the terms on offer to stay in the euro not to leave it. Of course after voters rejected those terms and voted for magic Tsipras delivered by signing up to worse ones. (Again a bit like Brexit)

 

[GlennB]

No he didn't. Greek voters never voted to leave the euro. Rather like the UK brexit camp, Tsipras/Syriza offered an impossible ticket of "Don't repay Angela and Christine yet stay in the euro".

The referendum in 2015 was about rejecting the terms on offer to stay in the euro not to leave it. Of course after voters rejected those terms and voted for magic Tsipras delivered by signing up to worse ones. (Again a bit like Brexit)

Yeah yeah yeah. Had he used the referendum result to say "shove your offer" the Greek people would have supported him. Damn few over here saw it as anything other than a vote to leave or an insistence on the Varoufakis/IMF line of gaining debt relief and an end to punitive austerity.

 

[ddt]

Greece's initial problems were due to precisely what you describe, so you're right up to that point. What has happened since then has been geared to what the article says. The Troika should have kicked Greece out but instead knowingly crucified it, for the EU/EZ's benefit. And the IMF knew it all along.

But I doubt you even read the Telegraph piece.

Or done some serious debt restructuring. As I understand it, all the money from those bailout packages first and foremost go to repaying the loans to (mostly German and French) banks, and only the crumbs end up in the Greek economy.

And everybody knew - even the stray dogs in Athens - knew that the Greek government was corrupt and borrowing money it could never pay back (so that the local politicians could line their pockets)

For every stray dog that's fed and kept alive by PASOK supporters there's another stray dog that's fed by ND supporters.

 

[Francesca R]

Damn few over here saw it as anything other than a vote to leave or an insistence on the Varoufakis/IMF line of gaining debt relief and an end to punitive austerity.

Have you got anything corroborating that part? I was following events at the time (my job) but not from on the ground, all the info I had said that there was always bugger-all popular support for leaving the euro, even as that bracket increased a bit over recent years.

 

[GlennB]

Have you got anything corroborating that part? I was following events at the time (my job) but not from on the ground, all the info I had said that there was always bugger-all popular support for leaving the euro, even as that bracket increased a bit over recent years.

Anecdotally, yes. I too noted many business people, of businesses large and small, dreading an exit from the Euro. But 'the little old lady over the road' had just as many votes as an individual running a business.

Point is that nobody seriously expected a 'No (stick your offer)' vote to result in the PTB doing a u-turn, seeing sense and adopting the debt forgiveness/restructuring line that Greece was pushing for. The 'No' was an act of defiance born of hopelessness and one which, I'm utterly convinced, came as a shock to Tsipras.

Unfortunately for him the simple word 'No' is a famous one in the history of Greek crises and he was left looking stupid.