Sunday, May 27, 2012

The IMF's Christine Lagarde declares that Big Capital doesn't care about poverty in Greece

Christine Lagarde in her tenure as Managing Director of the International Monetary Fund (IMF) has been cultivating an image as somewhat more flexible and realistic than the starry-eyed devotees to neoliberalism, the theology of the Great God Free Market that passes itself off as an economic ideology.

The Economist's cartoonist KAL gave us a glimpse of how this works out in practice in his 04/28/2012:

Lagarde is also showing how thin a veneer of humanity lies behind what she sees as the role of the IMF as the faithful servant of Big Capital and giant international creditors, as we see in : Larry Elliott and Decca Aitkenhead, It's payback time: don't expect sympathy – Lagarde to Greeks Guardian 05/25/2012. This exchange speaks volumes:

In an uncompromising interview with the Guardian, Lagarde insists it is payback time for Greece and makes it clear that the IMF has no intention of softening the terms of the country's austerity package.

Using some of the bluntest language of the two-and-a-half-year debt crisis, she says Greek parents have to take responsibility if their children are being affected by spending cuts. "Parents have to pay their tax," she says. ...

Asked whether she is able to block out of her mind the mothers unable to get access to midwives or patients unable to obtain life-saving drugs, Lagarde replies: "I think more of the little kids from a school in a little village in Niger who get teaching two hours a day, sharing one chair for three of them, and who are very keen to get an education. I have them in my mind all the time. Because I think they need even more help than the people in Athens."

Lagarde, predicting that the debt crisis has yet to run its course, adds: "Do you know what? As far as Athens is concerned, I also think about all those people who are trying to escape tax all the time. All these people in Greece who are trying to escape tax." She says she thinks "equally" about Greeks deprived of public services and Greek citizens not paying their tax.

"I think they should also help themselves collectively." Asked how, she replies: "By all paying their tax."

Asked if she is essentially saying to the Greeks and others in Europe that they have had a nice time and it is now payback time, she responds: "That's right."
She defended her position further by stressing that just how she and the IMF see the world:

In her interview Lagarde says Greece is not getting softer treatment than a poor country in the developing world, and that the IMF does not find it harder to impose strong conditions on a rich nation.

"No, it's not harder. No. Because it's the mission of the fund, and it's my job to say the truth, whoever it is across the table. And I tell you something: it's sometimes harder to tell the government of low-income countries, where people live on $3,000, $4,000 or $5,000 per capita per year, to actually strengthen the budget and reduce the deficit. Because I know what it means in terms of welfare programmes and support for the poor. It has much bigger ramifications."
A clearer idea is also emerging of what Angela Merkel sees as growth measures to stimulate the economy:

Signs emerged of a widening gulf between Germany and France over whether common eurobonds should be issued to help those countries, such as Greece and Spain, with high interest rates on their debt.

[Faithful Angiebot] Jens Weidmann, president of the Bundesbank, poured cold water on the idea – which is strongly backed by the French president, François Hollande – and also said financial aid to Greece should be cut off if it failed to keep to the bailout deal.

Jürgen Fitschen, joint head of Germany's biggest bank, Deutsche, described Greece as "a failed state … a corrupt state". Separately, however, there were reports suggesting that the chancellor, Angela Merkel, was dusting down the economic modernisation plan used to revive East Germany after the fall of communism in the belief that similar measures could be applied to Greece and other struggling eurozone countries. Today's Der Spiegel magazine says Merkel will present a six-point plan based on the East German blueprint as a growth strategy. It includes measures such as privatisation, looser employment law and lower tax rates.
In other words, Angie's supposedly new prescription for growth in Greece and elsewhere is: cut taxes for the wealthy, bust more unions and weaken job security, sell of public assets and give private companies the ability to export more of the country's jobs.

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