Dear IMF, Please Put Greece Out Of Its Misery

Tyler Durden's picture

Submitted by Michael Shedlock via,

For the umpteenth time, the IMF has warned that Greece cannot meet fiscal targets set by its creditors. And once again, the IMF insists that it will not be a part of the “Troika” unless the goals on Greece are realistic.

History suggests the IMF will cave in to Germany and agree to some half-baked plan (make that 1/8th baked plan) that will supposedly put Greece back on track. Such nonsense has been going on for years.

Mercy, Please!

[It's worse than the Great Depression...]

h/t @MehreenKhn

Here we go again: IMF warns Greece Won’t Meet Fiscal Surplus Targets Set By Europe.

Greece’s primary budget surplus will rise to 1.5 percent over the long run from about 1 percent last year, amid a modest recovery, the IMF said Monday after executive directors met to discuss the fund’s annual assessment of the nation’s economy. Still, the projected surplus falls short of the 3.1 percent forecast by the country’s European creditors.


The fund reiterated its view that Greece’s debt is unsustainable. Most of the executive directors don’t believe the economy needs more fiscal consolidation, the IMF said.


The IMF has said it would consider giving Greece a new loan to supplement the 86 billion euros ($92 billion) it’s receiving from euro-area countries, but only if the nation’s debt-reduction plans are credible. [Mish comment: How many times have we heard that?]


Greece’s government debt will reach 275 percent of its gross domestic product by 2060, when its financing needs will represent 62 percent of GDP. Public debt will reach 181 percent of GDP this year, the IMF projected Monday.

Time for Greece to Break the Deal

The Failed Revolution notes Yanis Varoufakis, the former finance minister of prime minister Tsipras, calls on Tsipras to Break the Destructive Agreements.

The following as translated and explained by the Failed Revolution, from

Varoufakis wrote among other things:

The night of the Greek referendum, I tried hard to explain to the Greek PM that the submission of Greece to the third memorandum was Schäuble’s real plan (not Grexit).


In reality, there was no hope that the 3rd toxic “program” for Greece would be rationalized progressively through the support of the European Commission to Athens. Meaning, there was no hope that IMF’s austerity and anti-social measures could be soften. The fact that Moscovici, Juncker, Sapin and others gave such promises, is no excuse because the Greek government knew since May 2015 that these people know how to tell lies, or, they are unable to keep their promises when they don’t lie.


Suddenly, the Schäuble-IMF-ECB attacked on Greece, demanding exhausting measures, while Merkel-Hollande-Commission didn’t do anything. Tsipras then retreated for one more time in order to “save” Greece. This was Schäuble’s plan.


Tsipras promises, one more time, that he will not retreat (this time!) by legislating new austerity even after 2018. If he means it, I remind him what we had agreed that is necessary and which – even today – is the only thing that may prevent the worst things to come.


Prepare for unilateral restructuring of Greek bonds held by the ECB, which must be repaid in July (and after).


Prepare the electronic system of transactions through Taxisnet which I had designed, I had started building it and even announced it to the new Minister of Finance, Euclid Tsakalotos, when I delivered the Ministry.


Therefore, if indeed the Greek PM means it this time that he will not retreat, he should prepare for breaking the deal with the creditors, so that to prevent it. The design of a parallel system for payments is ready since 2014, as he knows.

No Reason to Act Now

I offer one significant improvement to the plan: Stall for 3 months.

Wait for the IMF to do what they say. If the IMF acts first and backs out of the deal, it will put extreme pressure on Germany to provide relief.

Schäuble has stated Greece will not provide any more credit relief. So why act now?

Instead of acting in advance, Greece can blame Germany and the IMF unless there is significant relief. And as a side bonus, Merkel will take the hit for having a country exit the Eurozone on her watch.

Won’t that be fun?

Another Greek WTF Showdown Moment Explained

I wrote about much of this a few days ago in Another Greek WTF Showdown Moment Explained.

The IMF has once again threatened to pull out of the Troika following a warning that Eurogroup Loan Measures Not Enough for Greek Debt.


Perpetual Nonsense

The IMF argues correctly that Greek debt is unsustainable. Previously the IMF correctly argued Greece could not maintain a primary account surplus of 3.5 percent.


Yet the IMF now demands Greece automatically implement rules forcing it to have a primary account surplus of 3.5 percent of GDP as far as the eye can see.


Last week Eurointelligence reported that Greek officials were elated the much-despised IMF might exit the program. Although Greece hates the IMF, the IMF has at least been partially on Greece’s side, arguing for debt reductions.


Were the IMF to actually pull out to happen, Schaeuble wants Greece out of the Eurozone.


Meanwhile, Eurozone officials pretend the program is working when they know full well its not.


WTF Moments

This is one of those WTF moments where statements from Greece, from the IMF, and also the Eurozone make no apparent sense.


Yet, despite the obviously apparent nonsense, it’s possible to piece together what’s happening.

  1. Neither Germany nor the Netherlands is willing to throw Greece the smallest of bones for fear of election consequences. It’s far easier for Eurozone nannycrats to pretend things are running smoothly.
  2. Schaeuble has long wanted Greece out of the Eurozone. But Germany does not want to take the blame. Instead, Schaeuble wants the IMF or Greece to take the blame.
  3. The IMF does not want the blame either, so it takes a preposterous stance that the debt is not sustainable but a 3.5% primary account surplus for as far as the eye can see is sustainable. The IMF takes this view despite having argued many times that 3.5% is not sustainable.
  4. By pretending to now be in favor of 3.5% perpetually, the IMF can argue it is not one-sided to Greece.
  5. Despite the fact the IMF is more on Greece’s side than Germany or the Eurozone nannycrats, Greece hates the IMF so much that its position of not wanting the IMF involved overrides common sense.
  6. As an alternative to point 5, consider the possibility that Greece wants outs of the Eurozone, but none of the politicians want to take the blame. Instead, the politicians want to blame the IMF or Germany and are just itching for the IMF to get the hell out so they could do what they wanted to years ago (exit the eurozone). In this possibility, Greece looks to place the blame elsewhere and is waiting for the right moment.


Troika Blame Game Theory

Points 1-4 are certain. Points 5-6 are pick one. Despite the apparent absurdity of conflicting views and the IMF’s changing stance, blame game theory explains all you need to know. Here is a shorter synopsis.

  1. Greece wants to blame the IMF and Germany
  2. Germany wants to blame Greece and the IMF
  3. The IMF wants to blame Greece and Germany

Make the IMF and Germany Commit First

Greece has four reasons to stall, making the IMF and Germany act first.

  1. If the IMF does not insist on debt relief, Greece can blame the IMF and Germany.
  2. If the IMF does insist on debt relief and Germany will not go along, then Greece can blame Germany.
  3. If the IMF and Germany do not provide enough debt relief, then Greece can blame both of them.
  4. If the IMF and Germany provide enough debt relief, then Greece wins as well.

Greece is in a no-lose setup if it stalls long enough to get the IMF and Germany to play their cards first.

Expect Trump to Pressure IMF

Trump has stated Greece should abandon the Euro, and Germany is a currency manipulator.


Thus, it is reasonable to believe Trump may threaten to pull funds from the IMF unless they cooperate.

Cooperation in this case means backing out of the Troika deal.

Related Articles

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  2. Trump Accuses Germany of “Currency Exploitation”: Merkel vs. Trump, Is Either Side Telling the Truth?

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DontGive's picture

Greece those rear ends up.

halcyon's picture

Greece needs to stand up for itself and fuck the troika.

CPL's picture

Exactly.  Why is the IMF recognized as an authority?

Simple question that had not been answered.  Until that question is answered, Greece should tell them to go fuck themselves.  Not like anyone here can adequately answer that question.

Fundies's picture

Your talking about people who love to cop it in the ringhole.

Occident Mortal's picture

This article is gobbledegoop.

captain-nemo's picture

Just like Schumer's tears, this is good comedy too.

SoDamnMad's picture

Trump should talk up Greece.  WHY 1. To piss off Turkey 2. To piss off Germany  3. To piss off the ECB  4. To piss off Brussels  5. To piss off the banks  6. To piss off everyone who isn't already pissed off at him.

gouyou's picture

7. To get the Euros to rise...

cwsuisse's picture

Category No. 6 does not exist, at least not in Europe

Fireman's picture

Tsipras still has no balls, Schaüble still has no legs and Varoufakis is'nt as scary as he used to be.

When Italy and France jump there will be a mad dash for the lifeboats that were never there.


Onward to the co££ap$€ of worthless Pentacon protected fiat filth and the execution of the banksters and political whores that peddle it!

Dead Canary's picture

Pentacon? I think you meant to say Pentag....

Oh, I get it.

BurningBetty's picture

Greece is in a dire need of a Donald Trump character who will just tell creditors, the IMF, Germany and the EU to F off. Return to Drachma and devalue. They all know it's inevitable if they want to get out of this misery. How many more years of this are they willing to stand?

Sandmann's picture

Greece imports medicines and oil......just how will it pay for them ?

gespiri's picture

This is ECONOMIC RAPE done by both the bankers and so-called refugees!

gouyou's picture

The root of the question is still who is holding greek debt, back in 2009 a third was held by French banks and institutions, a quarter by Germans and around 12% by Britishs. If Greece gets out, there is a major chance that you'll see other countries also asking to get away (Portugal, Ireland, and then Italy, ...). The Euro was kept in place to save major banks in the Eurozone and was kept in place to soak up German surpluses.

Today the European Financial Stability Facility and the European Central Bank hold two third of it, the IMF 10%. I do not see the Eurozone and Schaueble accepting a huge write-off. I do not see Trump accepting a write-off either: the EUR/USD would pass the 1 psychological barrier...

One other element to take into account is the strategic position of Greece facing Turkey and taking in the majority of the refugee flow.

gouyou's picture

BTW, Germany is on the hook for 56B€ in case greek defaults as part of the European Financial Stability Facility.

samjam7's picture

I agree, now after Erdogan couldn't be ousted by Turkey's fith column (Gulen/CIA stooges), Greece becomes more important than ever, I do not think the west controls Turkey fully anymore and their only remaining leverage over it is economic really. Schäule wants Greece out without taking the blame for it and he was this close to achieving the goal that fateful summer 2015, yet Merkel and the US overruled him. 

Now the best thing Greece can do is to wait and bide its time, it doesn't have the capacity to pay its July obligations and either the IMF or Germany will have to cave. Germany is under pressure due to upcoming elections in September/October, the IMF is under pressure because literally everyone else is watching how they treat Greece compared to other debtors around the globe. 

Sandmann's picture

Take a look at TARGET2

OverTheHedge's picture

Just for Greece it is not a huge amount, but if you put Italy, Spain, Portugal, and perhaps France in the mix too, then the numbers get quite big. If the Eurozone does fold, I'm not sure just how the Target 2 debt gets sorted out, other than by using old-school methods (i.e. tanks, planes and quite a lot of dead people).

zippy_uk's picture

The Greeks should wait until that socialist shmuck Shultz gets in THEN pull the default. Oh the irony.... (LOL)

Batman11's picture

Privatising previously public companies, austerity and cutting Government spending.

The IMF and World Bank have been doing this for 50 years left a trail of disaster through South America, Africa, Asia, Russia, Eastern Europe and now Western Europe with Greece.

For 50 years they thought it was because countries didn’t implement their programs correctly.

Eventually it dawned on them that it was their program that was the problem.

Germany is full of neoliberal ideologues, that believe what they believe because they are ideologues.

When real world experience meets the ideologues, who wins?

Keep watching.

gouyou's picture

Take a look at the work of Mark Blyth: either is book or one of his lecture on youtube...

Sandmann's picture

Germany is full of neoliberal ideologues


You are not serious !  Germany is a cartellised society with rigged markets and the same prices in every store

M_Size_Serbian's picture

Dear IMF, Please Blow Yourself In To 1000B Pieces And Put Half World Out Of Its Misery.

Spiro The Greek's picture

Lets talk Trump Greece...shouldn't kick a dead horse.

The last of the last hope was indeed Varoufakis and his views.

Now it too late for anything.

I just hope that we take Germany down to the abyss with us.

No salvation.....just revenge. 

stocker84's picture

Germany will not be destroyed... Just diminished.

Hopefully, the people in Greece... The new generation, at least... The ones that haven't been indoctrinated yet will go back to philotimo. Until Greece grows some balls and gets their philotimo back, they will be insignificant other than a travel destination. Lower quality of life, too.

haruspicio's picture

Default for fuck's sake.

JailBanksters's picture

Misery, Hell No

Just consolidate all their previous loans into one loan, and you loan them money to that.


Sandmann's picture

You have no idea. Greece never sees any money. It is a pass-thru trade to the Banks

cwsuisse's picture

Mr. Sandmann is right. About 95% of all new loans are sucked up by the creditors for redemptions, interest and administration cost. Greece has ceased to exist and is no longer a country with own government. Freaks like Merkel and Schäuble are pulling the strings. 

Sandmann's picture

Greece has this problem too

Obama was constantly on the phone to Merkel to prevent Greece defaulting. It is not just Germany, Berlin was simply Obama's tool. Greece is destroyed and Turkey is happily undermining its former colony by flooding it with refugees and violating its air space.


Sandmann's picture

In 2014, Greece exported $33.2B and imported $60.8B, resulting in a negative trade balance of $27.6B. In 2014 the GDP of Greece was $235B and its GDP per capita was $26.9k.

 top exports of Greece are Refined Petroleum ($10.5B), Packaged Medicaments ($1.24B), Aluminium Plating ($705M), Non-fillet Fresh Fish($548M) and Other Processed Vegetables ($458M), using the 1992 revision of the HS (Harmonized System) classification. Its top imports are Crude Petroleum ($13.3B), Refined Petroleum ($4.24B), Packaged Medicaments($2.88B), Passenger and Cargo Ships ($2.53B) and Petroleum Gas ($1.19B).

op export destinations of Greece are Turkey ($4.16B), Italy ($3.08B), Germany ($2.27B), Bulgaria ($1.67B) and Cyprus ($1.62B). The top import origins are Germany ($6.24B), Russia ($5.66B), Italy ($4.76B), Iraq ($4.75B) and China ($3.39B).

cwsuisse's picture

For all means and purposes Greece was, is and will be bankrupt. Unfortunately Greece missed the historic opportunity to get rid of the EU and the EURO and to advance to a remote star which might now at first be reached by Great Britain. The culprit is also clear: Mr. Tsipras and his fellow compatriots who are very nice people but unfortunately very bad at arithmetics. 

BlueHorseShoeLovesDT's picture

While you are at it put the US down too

acheron2016's picture

It is completely ridiculous to talk about Greek debt in 2060!  The Euro will not exist decades before that.  Greece will probably not exist at that point.  And beyond all that using such generational projections probably serves no higher purpose than distracting from the fact that Greece will have to default on 90%+ of their bonds in closer to 4 years than 40.


Travesty begets Farce!