Why The IMF Will Reject The Latest Greek Proposal In Just Two Numbers

Tyler Durden's picture

As we summarized earlier, the latest "final" Greek proposal is in trouble: it may very well not pass the Greek parliament due to mounting objections among all parties not least in Tsipras' own Syriza. But a Greek parliament vote on the decision may be moot: according to Bloomberg, Tsipras will fly to Brussels on Wednesday, where he will meet the heads of the Troika: Draghi, Juncker and, of course, Christine Lagarde.

It is the IMF's head that will tell Greece to go back to the drawing board.

Recall that as the WSJ reported, "the Washington-based IMF has said Greece’s economy is already too heavily taxed and that too many additional tax increases would hurt economic growth, making it harder to pay down Greece’s debt."

Also recall that as IMF's Olivier Blanchard explicitly demanded, Greece needs to cut spending, not hike taxes - which it has patently demonstrated it is incapable of collecting - and especially pensions: "Why insist on pensions? Pensions and wages account for about 75% of primary spending; the other 25% have already been cut to the bone.  Pension expenditures account for over 16% of GDP, and transfers from the budget to the pension system are close to 10% of GDP.  We believe a reduction of pension expenditures of 1% of GDP (out of 16%) is needed, and that it can be done while protecting the poorest pensioners."

So why will the IMF throw up all over the latest Greek proposal in just two numbers? Here is the answer, courtesy of Kathimerini:

The proposals contain 7.9 billion euros of measures, of which 7.3 are from increases to tax and social security contributions.

The IMF demands no tax hikes and pension cuts. Instead it will get almost exclusively tax hikes, amounting to 92% of the proposed measures, and just a few cuts, few of which actually impact Greek pensions. In short: the proposal is not only unsustainable, it is also unenforceable, something which the Germans - already facing a third Greek bailout - will be quick to point out.

Which is why tomorrow, after Tsipras is finished with the meeting with the Troika, he will have a new homework assignment: revise the "final final" proposal and come up with much less in tax hikes, much more in spending cuts: something which the already furious hard-line elements within Syriza will have a field day with.

Then again, we already knew all of that:

  • IMF DISAGREES WITH GREECE ON CORPORATE TAX, VAT AND PENSIONS - EU SOURCES

And all this takes place just 7 days before the Greek payment to the IMF is officially due, at which point Greece may or may not be declared in default, but when the ECB will no longer be able to say Greece is compliant with the terms of its bailout program and will have no choice but to yank the ELA.

Full Greek proposal below (pdf link).

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Philo Beddoe's picture

My sister in law makes $7000 per month posting comments about the Greek exit. It is really easy. Here is how she does it www.greekbullshittocoverupgreaterbullshit.com 

 

Tall Tom's picture

There are other websites available and other articles on this website available.

 

You do not have to read about Greece here if you do not want.

 

Do you pay the bills for running this website?

 

Tyler can post whatever he wants. If he posts things which I do not need or want to read then I go elsewhere...which I do at times.

 

This website is not published at the behest of you.

 

It is not a Pay Site.

 

It is not for your personal entertainment. Neuther is it for mine.

 

Your ENTITLEMENT MENTALITY stinks to high heaven. You are not entitled to anything here especially since you do not pay for it.

 

Tyler can publish what he damned well pleases. You have no right to demand anything different.

 

And because of the energy being spent protesting the publications, probably in order to quash this story, perhaps Tyler needs to publish MORE about this story.

 

It just tells me that there is something that you guys have an agenda and need the story buried.

invisible touch's picture
invisible touch (not verified) Tall Tom Jun 24, 2015 2:47 AM

try speak  without your own tong stuck in your ass, it is more pleasent to ear.

TheGreatRecovery's picture

ULTIMATE WARRIOR 

Now that's just stupid.  Two fake names on the same page.

The central planners's picture

I think the next shit-show its going to be Puerto Rico

Bobbo's picture

Guy GOSH!  I just love watching the Chorus march back and forth across the stage chanting its various criticisms and condemnations.

JustObserving's picture
Why The IMF Will Reject The Latest Greek Proposal In Just Two Numbers

Two numbers?

Not enough people hungry?

Not enough people without healthcare?

The IMF Itself Is a Criminal Organization

The IMF’s official job sounds simple and attractive. It is supposedly there to ensure poor countries don’t fall into debt, and if they do, to lift them out with loans and economic expertise. It is presented as the poor world’s best friend and guardian. But beyond the rhetoric, the IMF was designed to be dominated by a handful of rich countries – and, more specifically, by their bankers and financial speculators. The IMF works in their interests, every step of the way.

The organization takes over poor countries, promising it has medicine that will cure them – and then pours poison down their throats. Whenever I travel across the poor parts of the world I see the scars from IMF ‘structural adjustments’ everywhere, from Peru to Ethiopia. Whole countries have collapsed after being IMF-ed up – most famously Argentina and Thailand in the 1990s.

http://themillenniumreport.com/2015/06/the-imf-itself-is-a-criminal-orga...

agent default's picture

I wish you could explain to me how moar taxes and moar government and moar statism would make less people hungry. 

Clesthenes's picture

“The IMF is a Criminal Organization”

Very perceptive remarks.  May I re-inforce?

The IMF lends huge amounts of money to criminal and useless classes of various countries and then crushes the middle class, or what passes for such, with the heavy burden of paying such loans and by “pouring poison down their throats”.

We see the same in this country; it is a concerted and long-range operation to annihilate all opposition, world-wide, to rule by thieves.

I collected evidence of it from examinations of publications of the US government and Federal Reserve.

I recently examined a Financial Report of the US Government. I found, for example, that government accountants made 75-year projections as if the government would not pay interest on its debt instruments during that time.

And then there were street gangs and drug cartels, the government’s – and China’s – role in arming, protecting and forming alliances with such gangs and cartels… and a dozen or so other items.  They all point to a conclusion that a vast operation is being perpetrated…  I began this Part 2 (of my examination) with the question, ‘What financial shock do Judeo-Bolsheviks plan?  (Part one and Part two)  Do they plan to inflate the dollar to zero… push stocks to a PE ratio 300, then slam them to a ratio of single digits or even minus numbers… repudiate the federal debt… replace Federal Reserve bank notes with Treasury bank notes…?’  And, how do China’s ghost cities fit into this unprecedented operation?

“How much damage has to be done before people… start waking up?”

Only a very, very small fraction of Americans will ever wake up; others will die or kill rather than face truth.  Americans are a conquered nation; not by ordinary warfare, but by a lethargy induced by medication, an ignorance molded by indoctrination, to name only a few degradations.

espirit's picture

Can I just live in a cow-shit hut and have people leave me alone?

shovelhead's picture

Yes.

As long as you pay your taxes.

TheGreatRecovery's picture

Yurts in Mongolia might be the last free places on Earth.

new game's picture

somewhere in the amazon too.

TheGreatRecovery's picture

That's one reason I am so angry about the Amazon being systematically burned by Brazil to provide itself a safety-valve for its overpopulation addiction. 

Not the main reason, but one reason.  The main reason is that I don't think humans have a right to wipe out lots of other species.

Singelguy's picture

If you want a detailed explanation of how the IMF really works, read the book, The Shock Doctrine by Naomi Klein. It is a real eye opener.

http://www.amazon.com/Shock-Doctrine-Rise-Disaster-Capitalism/dp/0312427...

Tall Tom's picture

And I was led to believe that there was a "deal"???

 

LMAO.

 

But the Muppets bought it and Stocks soared as a result. See??? All is good and everything is always awesome.

shantyman's picture

My Name is Mr. Panos and this is a message from the Hellenic People around the World: FUCK YOU MALAKA!

yrad's picture

That dude is halarius...

i_call_you_my_base's picture

As I said in another comment, if syriza and the troika smack the moneyed greeks, it could turn them against the EZ. The IMF likely wants to keep the greek populace divided, with the wealthy and middle class (whatever remains) pro-EZ. If the greek people come together on anti-EZ sentiment, then they default and the IMF gets squat. The IMF must get its pound of flesh from the poors, not from the wealthy, or those in power, because those are the people that want to stay in.

Rainman's picture

back in the day, Bernank used to print up 7.3b fiatscos in the time it took to wipe his sorry ass

TheGreatRecovery's picture

And they STILL won't let Bernanke touch the Arkenstone.  Totally unfair!  :-)

pitchforksanonymous's picture

The wheels on the bus go round and round, round and round . . .

Until they don't bitchez!

 

Dr. Engali's picture

So we don't have a deal? Good, I am waiting in breathless anticipation for moar "news" about Greece.

Secret Weapon's picture

IMF is doing a China pivot and away from the Euro and USD.  They burn the Euro, the dollar then takes a derivatives dive, and everyone switches to a gold backed Yuan.  Also, Germany will be switching teams as well. 

headhunt's picture

Secret Weapon; China would have to use 'secret' math - How much gold does China have to be a 'gold backed Yuan'?

Bobbo's picture

How much to spring for a few BRICS of Gold-backed Drachma?

walküre's picture

Juncker inviting Tsirpas to high level talks in Brussels on Wednesday.

I think they will finally discuss GREXIT and what that will (confirmed) look like in great detail.

Greece can keep EUR for a transition period. ELA will be capped immediately. IMF and ECB hashing over the debt issue. Last tranche of 2nd bailout from EZ members goes straight into IMF and ECB to settle the outstanding payments there. No need for disbursement via Greek accounts.

Greece is out.

Bobbo's picture

The art of laundering fresh-made money.

fiftybagger's picture

You expect commies to not raise taxes but to enact spending cuts and cut pensions?  Hahahahahaha.  Hilarious!

Salzburg1756's picture

2 Numbers?

= Merkel and Lagarde?

espirit's picture

No, Blunts.

Get your facts straight.

Free_Spirit's picture

Strange the IMF actually making sense for once, but increasing tax on businesses makes no sense at all.  

YHC-FTSE's picture

Wake me up when the "final, final, final, final, final, final" proposal has been drafted.

flash338's picture

Wake me up when the Greeks finally defalt on all dept. I'm getting a little tired of watching reruns of "Economic Twilight Zone".

Phillyguy's picture

The IMF is not interested in wealthy tax evaders or people with large off shore bank accounts and money laundering operations. The IMF wants to cut money going to working people and retirees. Pensions/wages have already been cut in Greece. Workers, the unemployed and retirees in Italy, Spain, Portugal and France should pay close attention to what happens in Greece. They are next in line.

Fun Facts's picture

The IMF can't afford to lose 11 million captives.

Sudden Debt's picture

Captives?

Those 11 million sleep 20 hours a day and are drunk for the other 4.

They’re squaters!!

espirit's picture

They could probably teach us some about 'Exceptionalism'.

walküre's picture

I junked you. They're not squatters yet. Nobody is foreclosing on them. Technically it is still their home.

Spectre's picture

I'm growing very weary of this Grrece talk.

Strider52's picture

Spectre:

  It's like Groundhog Day, the same news every day. 

JLM's picture

Starting to get the impression they want a default.  There is no possible way for greece to generate growth to pay back loans.  The IMF is nuts.

BiPolarFrenchman's picture

The IMF wants Greece to default - it'll allow the US to place blame on the coming economic downturn abroad.  

Mamzer Ben Zonah's picture

Christine looks less like an Oompa Loompa

https://www.google.ca/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF-...

Must be staying out of the tanning bed.

Sudden Debt's picture

I SAY: TAKE ALL THE MONEY LEFT IN THE BANKS AND BUY EUROMILLION LOTTERY TICKETS!!