Austerity & Fascism In Greece – The Real 1% Doctrine

[Magda Hassan]

IMF Internal Meeting Predicts Greek 'Disaster', Threatens to Leave Troika

Read the PDF or HTML transcript of the IMF internal meeting.
by Julian Assange
Today, 2nd April 2016, WikiLeaks publishes the records of a 19 March 2016 teleconference between the top two IMF officials in charge of managing the Greek debt crisis - Poul Thomsen, the head of the IMF's European Department, and Delia Velkouleskou, the IMF Mission Chief for Greece. The IMF anticipates a possible Greek default co-inciding with the United Kingdom's referendum on whether it should leave the European Union ('Brexit').
"This is going to be a disaster" remarks Velkouleskou in the meeting.
According to the internal discussion, the IMF is planning to tell Germany that it will abandon the Troika (composed of the IMF, European Commission and the European Central Bank) if the IMF and the Commission fail to reach an agreement on Greek debt relief.
Thomsen: "Look you, Mrs. Merkel, you face a question: you have to think about what is more costly, to go ahead without the IMF--would the Bundestag say 'The IMF is not on board?', or [to] pick the debt relief that we think that Greece needs in order to keep us on board?"
Remaining in the Troika seems an increasingly hard sell internally for the IMF, because non-European IMF creditor countries view the IMF's position on Greece as a violation of its policies elsewhere of not making loans to countries with unsustainable debts.
In August the IMF announced it would not participate in last year's €86 billion Greek bailout, which was covered by EU member states. IMF Chief Christine Lagarde stated at the time that the IMF's future participation was contingent on Greece receiving "significant debt relief" from creditors. Lagarde announced that a team would be sent to Greece, headed by Velkouleskou.
Thomsen said internally that the threat of an imminent financial catstrophe is needed to force the other players into a "decision point". For Germany, on debt relief, and In the case of Greece, to accept the IMF's austerity "measures," -- including raising taxes and cutting Greek pensions and working conditions. However the UK "Brexit" referendum in late June will paralyse European decision making at the critical moment.
"I am not going accept a package of small measures. I am not..." said Thomsen. "What is going to bring it all to a decision point? In the past there has been only one time when the decision has been made and then that was when [the Greeks] were about to run out of money seriously and to default. [...] And possibly this is what is going to happen again. In that case, it drags on until July, and clearly the Europeans are not going to have any discussions for a month before the Brexits..."
Last year Greek Finance Minister Tsakalotos accused the IMF of imposing "draconian measures," including on pension reform. While Velkouleskou concedes in the meeting that "What is interesting though is that [Greece] did give in... they did give a little bit on both the income tax reform and on the.... both on the tax credit and the supplementary pensions."
But Thomsen's view is that the Greeks "are not even getting close [to coming] around to accept[ing] our views." Velkouleskou argues that "if [the Greek government] get pressured enough, they would... But they don't have any incentive and they know that the Commission is willing to compromise, so that is the problem."
Velkouleskou: "We went into this negotiation with the wrong strategy, because we negotiated with the Commission a minimal position and we cannot go further [whereas] the Commission is just starting from this one and is willing to go much further. So, that is the problem. We didn't negotiate with the Commission and then put to the Greeks something much worse, we put to the Greeks the minimum that we were willing to consider and now the Greeks are saying [that] we are not negotiating."
While the Commission insists on a Primary Government Budget Surplus (total tax minus all government expenditure excluding debt repayments) of 3.5%; the IMF thinks that this target should be set at 1.5% of GDP. As Thomsen puts it, "if [Greece] come around to give us 2.5% [of GDP in tax hikes and pension-wage-benefits cuts]... we should be fully behind them." -- meaning that the IMF would, in exchange for this fresh austerity package, support the reduction of the Primary Surplus Target imposed upon them from the 3.5% that the European Commission insists on to 1.5%.
These targets are described as "very crucial" to the IMF. The IMF officials ask Thomsen "to reinforce the message about the agreement on the 2.5%, because that is not permeating and it is not sinking very well with the Commission."
At one point, Velkouleskou refers to an unusual solution: to split the problem into two programs with two different targets: "The question is whether [the Europeans] could accept the medium term targets of the Commission, for the purposes of the program, and our targets for the purposes of debt relief." Thomsen further explains that "They essentially need to agree to make our targets the baseline and then have something in that they hope that will overperform. But if they don't, they will still disburse."
The EWG [Euro Working Group] needs to "take a stand on whether they believe our projections or the Commission's projections." The IMF's growth projections are the exact opposite of the Commission's. The Commission projects a GDP growth of 0.5%, and the IMF a GDP decline of 0.5% (even if Greece accepts all the measures imposed by the IMF).

REVEALED: The sordid wrangling between the IMF and EU which shows Greek democracy is dead

BANKERS have been caught red-handed apparently plotting to drive Greece to the brink of bankruptcy as part of a pathetic squabble with the EU which has effectively killed off the country's democracy.

By Nick Gutteridge
PUBLISHED: 00:00, Mon, Apr 4, 2016 | UPDATED: 00:14, Mon, Apr 4, 2016


GETTY
Bankers have been caught plotting to drive Greece to the brink of bankruptcyFinanciers from the International Monetary Fund (IMF) are prepared to force millions of Greeks into abject poverty to secure a petty political victory over Brussels, according to a leaked conversation between top officials.
The sordid wrangling shows just how dead Greece's supposed democracy is, with Prime Minister Alexis Tsipras now powerless to defend his people from its puppet paymasters in Berlin and Washington, where the IMF is based.
The international lender even wanted to use Britain's EU referendum as an excuse to drive the struggling country to the wall so that it could get its own way.

Related articles

• [URL="http://express.co.uk/comment/columnists/581311/EU-European-Union-Greece-Dark-Ages-Europe"]
  EU membership is dragging Greece back into the Dark Ages [/URL]
  
• [URL="http://express.co.uk/news/world/654485/Greece-migrant-crisis-EU-troops-Austria-soldier-borders"]
  Brussels could deploy own ARMY within the EU as Greece crisis deepeens [/URL]
  

Greek politicians have reacted with fury to the revelations, and have demanded immediate answers from IMF boss Christine Lagarde. In a response today she astonishingly asked Greece's former finance minister to "respect the privacy" of her staff, but also denied that the organisation would use his country's insolvency as a bargaining chip.
But in truth they have no power to change the situation, with their country now entirely reliant on international bailouts to stay afloat.
The shocking plot has been revealed in a leaked transcript of a meeting between two top IMF officials released by the whistle blowing website Wikileaks.
AFP
Greece is in the grip of the huge migrant crisisGETTY
Greece's democracy has been eroded by a tug of war between the IMF and the EUThe conversation, on 19 March, purportedly involves Poul Thomsen, head of the IMF's Europe department, and Delia Velculescu, leader of the IMF team in Greece, who are the senior officials in charge of Greece's debt crisis.
They are apparently discussing how to get the EU - and Angela Merkel in particular - to come around to their way of thinking over a restructuring of Greek debt.
The IMF says it will only sign up to a deal which involves debt relief for the stricken nation, a position Germany emphatically rejects.
The two parties are due to meet next week to discuss the next financial instalment for Greece, which will need fresh funding in the summer to avert a costly default.
GETTY
Former Greek finance minister Yanis Varoufakis reacted furiously to the revelationsGETTY
Many Greeks are furious at the stringent conditions attached to international bailouts During the conversation it is apparently suggested that the international lender should be prepared to bring about an "event" - in other words a financial crisis bringing Greece to the point of collapse - to force the issue to a head.
In the leaked transcript Mr Thomsen is quoted as complaining about the pace of talks on reforms Greece has agreed to carry out in exchange for the bailout.
He asks: "What is going to bring it all to a decision point?
"In the past there has been only one time when the decision has been made and then that was when they were about to run out of money seriously and to default."

Protests in Greece turn violent

Fri, February 12, 2016

Protests in Greece turn violent as over 45,000 people take to the streets to demonstrate against the cuts to pensions.

Play slideshow

[/url] [url=http://www.express.co.uk/pictures/galleries/4607/Protests-Greece-violent-police-pension-fighting-fire-tear-gas-pictures/Greek-farmer-is-detained-by-police-during-a-protest-against-planned-pension-reforms-outside-the-Agriculture-ministry-in-Athens-106308] EPA

1 of 23
Farmers protest in central Athens against the hike in taxes and planned pension reforms

• 
  
• 
  
• 
  
• 
  
• 
  
• 
  
• 
  
• 
  
• 
  
• 
  
• 
  
• 
  
• 
  
• 
  
• 
  
• 
  
• 
  
• 
  
• 
  
• 
  
• 
  
• 
  
• 
  

It's time to stop Greece's fiscal waterboarding by an incompetent, misanthropic troika
Former Greek finance minister Yanis Varoufakis

Ms Velculescu later agrees, saying: "We need an event, but I don't know what that will be".
Mr Thomsen also appears to suggest the IMF could pull out of the bailout altogether to force German Chancellor Angela Merkel to agree to debt relief.
Such a move could be politically difficult for Mrs Merkel, the key figure in the crisis.
He says: "Look..., Mrs Merkel, you face a question, you have to think about what is more costly: to go ahead without the IMF, would the Bundestag say 'the IMF is not on board?' or to pick the debt relief that we think that Greece needs in order to keep us on board? Right?"
He adds that, if Greece were to default, talks could be further delayed by Britain's referendum on EU membership.
Following the revelations former Greek finance minister Yanis Varoufakis raged: "As WikiLeaks revealed today, the IMF is planning to stall until July to bring Greece to its knees again in order to force Angela Merkel's hand.
"It's time to stop Greece's fiscal waterboarding by an incompetent, misanthropic troika."

Paul Mason, author of Postcapitalism??A Guide to Our Future, added: "It's clear from the transcript that the IMF has become a playground for neoliberal fantasists.
"To fantasise about inflicting yet another near bankruptcy on a teetering democracy reveals levels of insouciance about the welfare of human beings and the sovereignty of states incompatible with a democratic organisation.
"It proves, yet again, that the core of the economic doctrine that guides the global elite is the determination not to "give a s***" about real people, but to impose the doctrine even at the cost of state failure."
The IMF declined to comment, but said its public position on the matter was clear.
And in a letter to Mr Varoufakis today, its head Ms Lagarde wrote: "Any speculation that IMF staff would consider using a credit event as a negotiating tactic is simply nonsense.
"The IMF conducts its negotiations in good faith, not by way of threats, and we do not communicate through leaks."
http://www.express.co.uk/news/world/6579...eal-Greece