QUESTION: The Greek public, the majority of the Greek public is demonizing the IMF and think things are going to be worse than better. What is your message to the Greek public?
MR. STRAUSS-KAHN: Unfortunately, the Greeks are not the only ones demonizing the IMF. But, I think that the Greeks, as others, should see the IMF as it is today. The IMF is a kind of cooperative organization, where all the countries of the world work together to try to help those being in trouble. Today, Greece is in trouble. Tomorrow, maybe another. And so what is the IMF doing? Trying to provide advice on behalf of the entire international community, trying to provide resources to help on behalf of the entire community. So, the Greek citizens shouldn't fear the IMF. We are there to try to help them.....
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I suppose the hysterical debt burdened, cash strapped minions of the Greek Archipelago can be forgiven for their deeply felt trepidations concerning the generally unwelcome intrusion of the International Monetary Fund onto the scene of the desperate economic straits into which their otherwise idyllic socialist utopian society has descended. After all, with such agencies as the Eleftheros Typos broadcasting that "George Papandreou has unconditionally surrendered to the IMF" along with many other "left-wing extremist" organizations "demonizing" the humanitarian dispensations of the Fund, it would follow that the confused and hard pressed masses might misconstrue the benign and paternally philanthropic nature of this widely misunderstood international economic brotherhood. And what if so many Laocoons and Cassandras come forth to challenge and detract the Fund as the Greek journalist who posed this provocative question to "le grande seducteur" has suggested? Does this in any way diminish the responsibilities of the members of the international financial community who, possessed of such great fiscal and monetary resources, are in a position to extend much needed aid and a hand up to this economically devastated European nation? Why, that would be like questioning...well, Big Brother himself...
The wide media circulation of Mr. Strauss-Kahn's disavowal of any "demonic" intentions on the part of the IMF is reflective, not only of the deeply held suspicions regarding its activities, but is also indicative of the radically new terrain upon which the IMF has embarked. Western European countries have reflexively understood that the peculiar economic ministrations of the Fund have been exclusively reserved for the developing and emerging nations, generally of the third world type, or at best for the laggard cousins of Eastern Europe, only recently emerging from the shadow of Soviet domination. That a bona fide member of the European Monetary Union, albeit one of Southeastern Europe (SEE), would find itself in the gunsights of such a widely acknowledged international economic predator brings the very viability and purpose of the EU experiment into question, especially given Mr Louse-Con's thinly veiled threat of "Tomorrow, maybe another".
Perhaps even more disturbing to the "amour propre" of the EU members and especially the so- called PIIGS is that the IMF's impending "structural adjustments" are coming not only on the heels of the Greek government's own significant "austerity measures" but perhaps more importantly in the wake of the government and financial sector's serious fraudulent economic collusion with Goldman Sachs involving the now notorious CDS and IRS derivatives which are largely responsible for the country's massive external debt obligations and the ever deepening Greek economic malaise.The subsequent and ongoing attacks of institutional speculators and investors from hedge funds on Greece are only another prefigurement of what is in store for the other collapsing "sovereigns" in the EU as well as the bankrupt states in the U.S.
As the assemblage of financial ministers from the IMF/World Bank and the G20 got underway in Washington on April 24th the plans for a joint EU/IMF bailout of Greece were paramount. Agreed upon was the unprecedented and game changing loans of some $60 million of which the IMF was expected to contribute some $15 billion. A recent poll in Greece found that some 91% surveyed agreed with the foregone conclusion that the IMF largesse would come at the price of greater austerity measures; 96% thought that already significant levels of unemployment would rise (already 30% among youth) and 71% feared some level of social unrest. I guess that qualifies as "demonization", actually a most curious and yet appropriate appellation, given the performance of the Fund over the past decades throughout the developing third world economies among its 186 quota bearing member nations.
It is interesting to note that as recently as March 9. 2010, Mr. Strauss-Khan had suggested, flying in the face of all available evidence, that Greece "would resolve it's debt crisis without an IMF bailout". The stark disingenuous of this comment is revealed by the fact that a 2008 IMF report had predicted the Greek deficit to be 6.7% in 2010 when the actual figure was a little less than double that figure at a startling 12.7%. On the basis of this fraudulent analysis the IMF actually predicted a recovery in late 2010. Papandreou himself stated in December of last year that "salaried workers will not pay for this situation; we will not proceed with wage freezes or cuts. We did not come to power to tear down the socialist state". Some few months later the government instituted a general public sector pay freeze, specific public sector pay cuts, increased the Value Added Tax by 2% and sharply increased taxes on alcohol, tobacco, fuel and luxury items in addition to a crackdown on endemic tax evasion. Oddly enough these were some of the very conditions which the IMF had demanded in its Article IV consultations as early as May 25, 2007. It is not difficult to discern a distinct "quid pro quo" arrangement between the Greek government and its IMF counterparts perhaps to preempt as much as possible any public perception of the Fund's past and future involvement.
At the same time, Strauss-Kahn also depicted the wider Eurozone economy as strong and was insistent that other countries, in particular the SEE nations would not "be forced into Greece's predicament". When it was suggested to him that Spain or Ireland might be in danger of default, SK responded that those who entertained such speculations "only want to scare the financial markets". Such incredibly optimistic assessments of the particularly dire situation are quite typical of the third rate IMF economic prognostications, indicating either gross incompetence or outright mendacity or both. The following charts by Reggie Middleton are only two of several which he has compiled indicating the IMF proclivity for disinformation which can be found in abundance on the IMF website as well.
Indeed, it can be stated that the IMF penchant for public relations far supercedes any serious attempt at economic analysis. The press conferences and public statements which attended the annual IMF/World Bank annual spring meeting with G20 finance ministers is an obvious example of the kind of doublespeak which is the euphemistic, ambiguous, and obscure stock in trade of government and military propaganda intended only for mass consumption. In this respect the IMF/G20 assurances concerning the so-called recovery of the world economy are nothing more than a smokescreen intended mostly to provide cover for the continuation of criminal economic policies which brought about the necessary pre-conditions for the financial collapse. This will bring the Bretton-Woods agreement of 1944 to its intended denouément, namely the debasement and eventual devaluation of all Western currencies and the subsequent supplanting of the Anglo-American/European economic model with a pan-Asian industrial production and banking matrix colonizing and exploiting the vast labor pools and untapped resources of China, South Asia and Africa in tandem with replacing the US$ with the establishment of a new reserve currency with the IMF Special Drawing Rights (SDR) as its basis.
For the IMF/World Bank has a very distinct and pronounced agenda which it holds in common with the colonial empires of imperial conquest, which is nothing short of the complete domination of the world financial system in the name of neo-liberal economic policies. Its public persona as the guarantor of economic stability and the fluent exchange of goods, services, and capital only masks predatory economic policies devoted to the evisceration and exploitation of the social and economic order of the many developing nations who have the misfortune to have been the object of the IMF's destructive programs.
As the financial meltdown enters what an IMF economist recently called "its second phase", comparisons are being made between the Greek crisis and the collapse of Lehman Brothers in September, 2008. As the sovereign nations of Europe increasingly become targets for the institutional investors, hedge funds, and bond rating agencies and are picked apart in the process, the IMF will inevitably become the lender of last resort much as the Federal Reserve has become the source of an endless hurricane blizzard of monetization in the United States. With most of the so-called developing world firmly in its grip, the IMF will now be free to concentrate on the EU which as become the latest and most lucrative platform for the enrichment of its conglomerate partner corporate and financial institutions. It remains to be seen who will emerge victorious in the battle between the investors, who stand to take enormous losses in the event of a Greek default, and the ordinary citizens, who stand to suffer the privations and indignities of the extraordinary and unprecedented austerity measures which the international creditors along with their IMF allies are howling for, ostensibly to reign in the exponentially growing levels of debt service, which threaten to inundate not only Greece, but the entire Eurozone as well as the largest debtor nation on earth and the insolvent state governments in the United States. Given the natural predilection for human greed especially in the financial class and in the presence of binding legal contracts for the payout of trillions of dollars to various counter parties in OTC derivatives financial instruments, massive civil and social unrest seems not only likely but inevitable with the corresponding overwhelming reaction from police and military forces to "restore order".
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