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Lagarde Says No To IMF Aid For Greece
Over the course of six painful months of negotitations between Athens and its creditors, one concern lurking in the background was whether the IMF would be on board with a third program for Greece.
Questions over the IMF's role in the new €86 billion aid package came to a head this month when two consecutive "leaks" showed that according to an internal analysis of Greece's debt sustainability, the Fund would not be able to participate in the new bailout unless EU creditors were willing to write down their portion of Greece's debt.
This touched off a politically charged and explosive debate which pitted the IMF (and, by implication, the US) against Brussels (and, by implication, Berlin) on how to go about providing debt relief for the Greeks - the IMF pushed for haircuts, while Brussels favored "re-profiling."
Now, we get the first sign that the IMF may be ready to officially pull out. Here's FT, with the breaking story:
The International Monetary Fund’s board has been told Athens’ high debt levels and poor record of implementing reforms disqualify Greece from a third IMF bailout of the country, raising new questions over whether the institution will join the EU’s latest financial rescue.
The determination, presented by IMF staff at a two-hour board meeting Wednesday, means that while IMF staff will participate in bailout negotiations currently under way in Athens, the Fund will not decide whether to agree a new programme for months – potentially into next year.
That delay could have significant repercussions – particularly n Germany, where officials have long said it would be impossible to win Bundestag approval for the new €86bn bailout without the IMF on board.
According to a four-page “strictly confidential” summary of Wednesday’s board meeting obtained by the Financial Times, IMF negotiators will “participate in policy discussions” to ensure the eurozone’s new bailout “is consistent with what the Fund has in mind”.
But they “cannot reach staff level agreement at this stage.”
EURUSD is not reacting well...
FT goes on to note that "the IMF decided last week that its existing bailout programme ... needed to be scrapped because it could no longer achieve its stated goal of helping Greece recover to the point where it could return to private debt markets." That, in turn, "forced Athens to request a new IMF programme, which requires board approval, necessitating Wednesday’s meeting."
All of this comes at a decisively inopportune time. As discussed extensively earlier, PM Alexis Tsipras has now called for a Syriza referendum on the bailout, a move which marks the culmination of weeks worth of political infighting. The fractious relationship between the PM and Syriza hardliners might well unsettle creditors and the IMF's refusal to commit until the debt relief issue is solved only adds to the confusion.
Back to FT:
According to the summary, IMF staff concluded Greece no longer clears two of the four requirements in the IMF’s "exceptional access criteria" – the Fund framework that allows it to grant bailouts of larger-than-normal size.
Under the criteria, a bailout recipient must be able to prove it has the “institutional and political capacity” to implement economic reforms, and that “there is a high probability that the member’s public debt is sustainable in the medium term”.
Between Syriza's internal problems and Europe's indecisive stance on debt relief, it's clear that neither of these conditions have been met, which throws the IMF's participation into question because after all - and here's the punchline - Lagarde has to "be mindful about the reputation of the Fund."
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Despite the constant stream of bullshit coming out of Lagarde's mouth, the IMF will do anything to avoid freeing 11 million of their captive debt slaves.
"Let them print Drachmas!"
But Ukraine will get all the aid they need, after becoming a failed US puppet state.
I'm glad the IMF is out because i much prefer "troika" to "Quadriga" or whatever that bastardization was.
Den of vipers eating their young...
Has all of this made Greece into a "command economy" yet?
Definition of command economy :
Baha......USA has control of the IMF and this will strike a death blow to the Euro further strengthening the USD. Fuck the EU.
I wonder if this is another sign of a growing connection between Berlin and Moscow. They are deep trade partners already. If Putin's rebuke of Tspiras is factual then that could be taken as a sign of support for Moscow. Germany seems to have better realtions with Russia, and perhaps China, tahn it does with the rest of the EU and the US.
Printing Drachmas again will be the best thing that ever happened to them and let's see Brussels scramble to hold onto power once the bailouts stop.........well played Greece, bravo!
This is setting up very nicely for a major run up on the US stock market later this year as capital flees Europe for safety.
Capital fleeing EU, capital fleeing China.... US bond prices get bid, rates down regarless of Fed action..... Dollar goes Incredible Hulk strong...... very bad for Dow Components as no exports.... Then Dow sinks.... Turbulent days ahead if all that plays out.
What capital??
Das Capital https://en.wikipedia.org/wiki/Das_Kapital
People vote and dictators dictate.
words fall from her mouth like shit from ass.
Fool me twice shame on you....fool me thrice, shame on me! Go fish!
If you didn't learn after the 1st or 2nd time you don't deserve a 3rd
Nah, they will only throw good money after bad two times, not three.
yep it never ends. China starts selling treasuries, so Greece must be destabalised / data soft.
This is code of keep buying the US debt .. were the safe place ..look China stocks crashing.. EU in trouble (never mind
the IMF is run by US)..
When will market wake up US and Japan have the huge unpayable debt 18.5 trill and 10.5 tril..
Greece is tiny .. total is less ths 35% of current ECB QR.. they could by it all and roll it for ever and it would not impact the currency..
try that with 18.5 trill and 10.5 trill
I understand the game now. Just wait to see wich side falls apart faster- Greece or their creditors. Whoever falters faster gets the blame. Greece is out of the EZ regardless- that's beyond even questioning at this point.
of course the "blame game" is part of it. but as a small reminder, the IMF had to be dragged "kicking and screaming" into the whole Greece operation
if you look back to what we were discussing let's say three or four years ago, the consensus on the ZH commentary section was that the EUR was finished. period
so yes, I question why "Greece is out of the EZ regardless". possible, yes. sure... I would not be
I never said the EZ was finished. I said it was a complete failure. But I'm not aware of any instance where a governmental (or super-governmental) program has been abandoned just because it was an utter failure.
The US has decided that there will be debt write-offs (France and other European countries agree because they know they're going to need them eventually, too). Germany won't allow that to happen AND let Greece stay in the EZ at the same time. When they go, they must be punished to deter others from doing the same (or the sovereign debt write-off queue would line up at Germany's doorstep the very next day). Hence, my comment that Greece is out one way or another.
Yes, See the comment by Kissinger: "When enough bureaucratic prestige has been invested in a policy, it is easier to see it fail than to abandon it.”
Off topic,
But that statement describes why no matter how bad it gets, Obamacare is here to stay
NoDebt, why "a failure"? I heard that so many times, but the explanations change and shift continuosly, depending if it's Dr. Krugman or City of London bankers or the European Left
usually, they call for more Europe, and even Merkel finds it useful to repeat that call
we are in a currency war, it is mainly between the US and the BRICS, and the EURUSD is going down
deflationists are already calling their call, while the ECB is the only major going full speed QE
sounds like price stability. as ugly as it is, the EUR is working as designed, so far
the ball is in Yellen's court, let's see what she does until September or November
and who knows, perhaps we'll even witness a monetary peace or ceasefire of sort between the Eagle and the Dragon
Why a failure? For reelz??
Where do I start?
Let's start from the point where the only way Europe ever worked in the first place was that weaker countries would occasionally devalue their currency away from the Deutchmark to regain competitiveness. That WAS their stability mechanism. It's how they squared the books from time to time. Now that's gone.
There is no fiscal or soveriegn union (fiscal being a significant part of sovereign) to go along with the currency union. So without that all they have is the threat of "It can't be undone!!", "it's irreversible!" Which means you have sovereign claims between one country in the union and another country in the union that can NEVER be undone. Like this situation in Greece. THERE IS NO RESOLUION MECHANISM. The first time something runs up on the rocks there is only one solution if the two sovereign parties can't voluntarily agree- exiting the union.
You might notice in the US that Puerto Rico has run up on the financial rocks in much the same way as Greece has in Europe. Is there talk about cutting Puerto Rico loose from being a US Territory? No. Is there talk of Puerto Rico reverting to the Peso they used before we beat the stuffing out of the Spanish in 1898 and took the place from them? No.
Why is the Puerto Rico situation so much less damatic than Greece, despite the obvious similarities? Because we have a true union and YOU DON'T. And that's going to be a problem again and again and again until the Euro is no more or you fight a civil war to make it one country by force.
so basically you bear the nick "NoDebt"... but at the same time you think that our "debt shackles" aren't "solid" enough?
the question is for what. yes, if the whole plan of having the EUR becoming the next global reserve currency was indeed "the plan"... you'd be right
remember how Japan was screaming at China: "don't even think about buying more Japanese debt!!!"? there are dangers, in having a too "tasty" debt, particularly in the hands of foreigners
nope. thanks, but no, thanks
all this talk goes always back to more europe, common debt, of course with a common budget, which eventually leads to a common army
we did not plan on becoming anything even remotely resembling the US or the UK. you see faults, I see features
All fiat currencies are ponzi schemes. The Euro is flawed because of that. Your ideals will not trump the exponential function.
Ask the devil bitch what her numerology skills tell her about the situation.
Please don't use the word "Aid". It's more loans. Talking about "Aid" and "Bailouts" implies a gift and only serves to confuse the matter.
Given that the Greeks are never going to pay it back, I'd call it 'aid'.
Fair enough for those of us that understand, but too many people don't understand that these "bailouts" are nothing more than loan consolidations / refinancing.
too many people don't understand the fundamental difference between sovereign debt and private/personal debt
and the same don't understand the link between easy credit and heavy debt. not that ZH articles or the usual comments help, in this understanding
If a dictator would decree in your country a credit limit on people of around half their annual salaries, he'd be decried as monster, wouldn't he?
if the same dictator would decree that collaterized credit might only be up to half the current average value of that collateral in the last twenty years, the same
Personal debt: When you die your estate pays it off, if there is enough money. If not, the remainder is written off, not charged to that person's family.
Sovereign debt: Can not be written off and survives forever, through generations that had nothing to do with it's creation in the first place.
no, I seriously can't agree
this whole "estate" thing is bogus, imho. either the debt is collaterized, or it is personal. if you die, the latter is usually gone
a sovereign (in theory) does not die, ever. and in most cases it just needs to refrain from making too much more debt, and wait. or default in some form
flows, NoDebt. in the case of sovereigns, it's only the question of how much of the tax income is devoted to debt service
you might be too young to remember that sovereign debt had it's uses, when it still gave some return to savers/pensioners. it used to be "portfolio safety". it used to be a "fixture" of the system
and, as one of many consequences, it gave an alternative to volatile stocks
When one dies with personal debt, the amount owed is paid off with the assets of the defunct , if any. If none, the debt is wiped out.
Naturally, collateralized debt is taken care of by the collateral.
I'm finally starting to enjoy this game now.
Truly both sides are to blame here. The Greeks believe in The Neverending Miracle of Free Shit at Someone Else's Expense. The banksters knew full well this was the case, and used the Greek desire for free shit to enslave them.
Plizzzzzzzzzzzzzzzzz!!!
https://www.youtube.com/watch?v=xu5sTyAXyAo
Is that a promise or a threat ?
If Lagarde ever rocks up for a Chat, lock the doors quick.
I applaud here for saying it.....but I dont belive it....in the end she will GIVE them more money to steal...
She's trying to lure China in.
Tragoidiosapallooza!
Somalia has a better debt failure ratio for IMF Investment.
IMF = BROKE
IMF = OWNED BY CHINA
GREECE BAILOUT = NO FROM CHINA.
the biggest shareholder of the IMF and the only with a real veto power is still the US. nearly every other member, led by China and Russia, insist on reforms. but the US Congress blocks them
just some facts, just saying
^ Drinks bongwater.
Because the IMF only bails out Banksters.
IMF is now basically pushing the Schaeuble clan to admit that debt has to be officially REDUCED BEFORE any new deal for money injection; either that or its Grexit.
That debt reduction line is now being defended by EU and France but with the EXPRESS desire to see Greece stay in Euro obliging Germany to go to Euro federalisation down the road; aka fiscal and economic compact ; a road not accepted by Germany UNLESS France and all the others accept AUSTERITY SOUP bigtime up front. Germany wants to dominate at minimal cost to its own constituants and maximum profit. Which is normal, but not conducive to Euro solidarity in an increasingly dangerous outside world. Europe has phucked up its past copy by being indisciplined, opening the flood gates to East Europe and South Europe, to go broad based, on ONe monetary leg!
So this is now make or break Europe solidarity.
Either Merkel is with EU or she is with Schaeuble. She has been sitting on the fence for 5 years!
Schaeuble has officially told the EU, from his perspective the EU Commission powers have to be reigned in; aka ECB has to become MOAR Bundesbank of old!
That destroys core Europe! Behind Grexit, that Schaeuble wants, there is Brexit looming in 2016.
So...Mutti which way goes EU ? As the QUEEN BEE of Euro you have to decide!
PLEASE STOP F****** ABOUT!
Cos Greece is the FIRST step to either EU solidarity or Euro and EU destruction.
I think this two way game is now coming to face a brick wall. And Draghi has to know what he is supposed to do.
Lady Lagarde is right on cue to start twisting the knife in Mutti ribs at this eleventh hour for world capitalism !
Just like Erdogan is doing it on cue to Saud, as new head of Sunni side ambition, that would have Nato and Obama's backing to "neutralise" Syria both from ISIS and Assad; at the price that NATO accepts Kurd sacrifice! What a new game now begins in ME, with Iran pulling the Oil strings much more.
What a game of dastardly nation destroyers. Greece, Ukraine, Syrac all now on the rack.
half-time yet?
Greece is a failed state because it is a failed society/culture, ie hyper-corrupt and hyper-parasitic.
ANY money sent into Greece under ANY terms other than paying back creditors, will be wasted by the Greek money-squandering-machine, euphemistically called "government".
The best outcome in Greece for freedom-loving, anti-collectivism people worldwide, is for Greece to implode and collapse into civil war and total devastation, serving as a good example of the inevitable outcome of socialism for all the other countries to be forced to see.
Any person who lives off other people's earnings laundered thru politicians is a PARASITE and deserves to suffer a horrible death.
At least the IMF realizes it bought a pet rock.
Guess they don't want a second one.
Who elected this cunt?
he was appointed by a majority of the (elected) Hellenic Parliament. the very moment he has no majority support, he has to go
as a member of parliament, though, he was elected together with other 13 MPs in the https://en.wikipedia.org/wiki/Athens_A constituency
I don't like appointed reps.
They have no loyalty to an electorate of real people.
Tsipras is both. ministers usually are all both elected as MPs and appointed by MP majorities
as described, "Athens A" does not have to re-elect him. but that's the next election. meanwhile, the majority he leads does not have to support him
Varoufakis, for example, was booted out of the Financial Ministry, and is now only a member of parliament
It doesn't matter when the floor drops below the noose.
So Chuck, you say 'I don't like appointed reps.
They have no loyalty to an electorate of real people."
Do you think your congresscritters have 'loyalty' to the people that elected them?
hahahahahahahahaha
You're a hoot!
I believe the cunt in question is Lagarde - Easy mistake given her/his looks
lmao
She got the IMF chair when DSK was framed which, was the same day George Soros unwound his gold positi.
Coincidence?
If Greece would just open up a second front against the Russians, that IMF cash would be rolling in.
...mindful of the reputation of the Fund.
You gotta hand it to this dame.
Ukraine is the next Keynesian money pit.I believe it's a good plan by Putin.Let the stupid neo cons running the State Department and the EU right wing dictatorship spend themselves until bust on another Greece.Ukraine is another Detroit except exponentially larger in size and corruption.
IMF says No! to Greece but Yes! to WWIII
IMF Says It Will Continue Lending To Ukraine Even After A Default
http://www.zerohedge.com/news/2015-06-13/imf-says-it-will-continue-lending-ukraine-even-after-default-and-why-bad-news-greek-
86 billions here 100 billions there
I just would love to know where this rivers of money come from
Leatherface LeGarde with the kill shot
Greece is a second world country, on their way to third world.
First world: functioning bureaucracy.
Second world: self-serving and corrupt bureaucracy.
Third world: no bureaucracy.
No country can remain a second world country for long, without a dictatorial govt and police powers. That ain't Greece.
If Greece is booted from euro I am moving there.
I can not believe that 85 billion will suffice. The number has been calculated based upon the financial requirements for 24 month known by the end of the first quarter 2015 including an estimated 25 billion for the ailing banks. There are obviously two big question marks: (i) can Greece achieve a primary surplus of 1% in 2015 and 2% in 2016 as planned for in 1st quarter 2015? (ii) ist the guesstimate of 25 billion for the ailing banks correct? I do not believe so. I would assume that Greece runs a primary deficit of 7% in 2015 and 3% in 2016. Further I think that banks will rather need 45 billion instead of 25 billion which all in all puts 50 billion on top of 85 billion resulting in total requirements of 135 billion.
After calling for an around the braod 'haircut' for the bond holders and loaners, Lagarde got the IMF money back and for sure, is calling it quits, leaving the mess as an EU thing... May the Euro fail!
LaGarde needs to be Greek'd up the ass.
What if all the Greeks promised to work 40 hours a week and accept only 2 weeks vacation a year?
Would the loan go through then?
This is not the first time she/IMF has made noises like this. About 2 months ago when she dropped her first hint about the need for at least a partial debt write-down (very little media coverage on that intial statement, long before the IMF report on the same was leaked), Legrade said that the IMF might not participate in future bailouts.
-- Eric Dubin, Managing Editor, The News Doctors
"raising new questions over whether the institution
will join the EU’s latest financial rescue"
EU's "latest financial rescue" is equivalent to
a bullet in the head being a "rescue" from
dying a peaceful death in old age.
LaGarde does not want the IMF to be the patsy
that puts up all the money to pay off shyster creditors
in full unless they take a substantial haircut...
She does not want to play the same sucker
game that had the US taxpayer hand a grift payoff
to AIG so they could turn it over to Goldman Sachs
at full face value for bogus toilet paper.