Category Archives: IMF

Between Berlin and a Hard Place: Greece and the German Strategy to Dominate Europe

Andrew Gavin Marshall writes:

[…] The German bet was that the EU could outrun financial markets, using the crisis as an opportunity to advance fiscal and political integration and impose their demands upon the rest of Europe, while simultaneously preventing markets from creating a crisis so severe that it threatened the euro or the economies of the more powerful nations. Without the pressure of financial markets, the EU could not force its member nations to restructure their economies and societies. Chancellor Merkel would frequently describe the European debt crisis to her colleagues as a “poker game” between financial markets and politicians. The first to flinch would lose.

In 2011, Bloomberg noted that Merkel was “turning Europe’s sovereign-debt crisis into an opportunity to reshape the euro region in Germany’s image,” concluding that she had “pulled ahead for now in her battle to restore policy makers’ mastery over the market.” A biographer of Merkel explained, “It’s policy by trial and error.”

Merkel’s powerful Finance Minister, Mr. Schauble, was one of the chief architects of the German strategy for Europe’s crisis. In March of 2010, he wrote in the Financial Times that, “from Germany’s perspective, European integration, monetary union and the euro are the only choice.” But aid comes with strings attached and harsh penalties for violations. “It must, on principle, still be possible for a state to go bankrupt,” wrote Mr. Schauble. “Facing an unpleasant reality could be the better option in certain conditions.”

The German minister believed “the financial crisis in the eurozone is not just a threat, but an opportunity,” as markets would “force the most debt-laden members of the 17-nation currency union to curb their budget deficits and increase their competitiveness.” This would pressure governments to accept further integration into a “fiscal union” defined and shaped by Germany. “We need to take big steps to get that done,” Mr. Schauble said in 2011. “That is why crises are also opportunities. We can get things done that we could not do without the crisis.”

Financial markets were happy to oblige the German-EU strategy, as the crisis would force the reforms long demanded by banks as a solution to the irresponsible spending of governments: austerity and structural reform. From 2002 to 2012, Josef Ackermann led Germany’s largest bank, Deutsche Bank. In 2011, the New York Timesdescribed Ackermann as “the most powerful banker in Europe” and “possibly the most dangerous one, too,” standing “at the center of more concentric circles of power than any other banker on the Continent.”’

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The problem of Greece is not only a tragedy. It is a lie.

John Pilger writes:

An historic betrayal has consumed Greece. Having set aside the mandate of the Greek electorate, the Syriza government has willfully ignored last week’s landslide “No” vote and secretly agreed a raft of repressive, impoverishing measures in return for a “bailout” that means sinister foreign control and a warning to the world.

Prime Minister Alexis Tsipras has pushed through parliament a proposal to cut at least 13 billion euros from the public purse – 4 billion euros more than the “austerity” figure rejected overwhelmingly by the majority of the Greek population in a referendum on 5 July.

These reportedly include a 50 per cent increase in the cost of healthcare for pensioners, almost 40 per cent of whom live in poverty; deep cuts in public sector wages; the complete privatization of public facilities such as airports and ports; a rise in value added tax to 23 per cent, now applied to the Greek islands where people struggle to eke out a living. There is more to come.

“Anti-austerity party sweeps to stunning victory”, declared a Guardian headline on January 25. “Radical leftists” the paper called Tsipras and his impressively-educated comrades. They wore open neck shirts, and the finance minister rode a motorbike and was described as a “rock star of economics”. It was a façade. They were not radical in any sense of that cliched label, neither were they “anti austerity”.’

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Paul Mason on Greece: “Finance will be used in a hostile way if you flout the sovereignty of Europe”

‘Greece will have to implement the tough austerity measures demanded by its lenders, plus hand €50bn of assets to a privatisation fund, where sales will be used to pay down debt.’ (Channel 4 News)

Greece is the latest battleground in the financial elite’s war on democracy

George Monbiot recently wrote from The Guardian:

Irish famine, original illustrationGreece may be financially bankrupt, but the troika is politically bankrupt. Those who persecute this nation wield illegitimate, undemocratic powers, powers of the kind now afflicting us all. Consider the International Monetary Fund. The distribution of power here was perfectly stitched up: IMF decisions require an 85% majority, and the US holds 17% of the votes.

The IMF is controlled by the rich, and governs the poor on their behalf. It’s now doing to Greece what it has done to one poor nation after another, from Argentina to Zambia. Its structural adjustment programmes have forced scores of elected governments to dismantle public spending, destroying health, education and all the means by which the wretched of the earth might improve their lives.

The same programme is imposed regardless of circumstance: every country the IMF colonises must place the control of inflation ahead of other economic objectives; immediately remove barriers to trade and the flow of capital; liberalise its banking system; reduce government spending on everything bar debt repayments; and privatise assets that can be sold to foreign investors.’

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#ThisIsACoup: Dimitri Lascaris and Michalis Spourdalakis on the Humiliating Eurozone Offer to Greece

Capitalism and Government Debt at Odds in Greece: Interview with Michael Hudson

Michael Hudson is research professor of economics at University of Missouri, Kansas City (UMKC) and a research associate at the Levy Economics Institute of Bard College. In this interview he says that unlike personal and corporate debt, there is no legal framework for writing off government debt, so there is deliberate anarchy in place. (The Real News)

Greek Voters Deliver Stunning Rebuke to Austerity: Dimitri Lascaris Interviews Michael Spourdalakis

Michael Spourdalakis is the Dean of the School of Economics and Politics at the University of Athens. In this interview with Dimitri Lascaris, he says that it is time for the Greek government to play hardball with the Troika. (The Real News)

Paul Mason on the Greek referendum: “For the first time in the history of the Eurozone, people power has happened”

In A World Of Artificial Liquidity – Cash Is King

Editor’s Note: Nomi Prins is a former managing director at Goldman Sachs and a former senior managing director at Bear Stearns. I would HIGHLY recommend reading her latest book, “All The Presidents’ Bankers“. You can read part two of this article here. Also, be sure to check out more of Nomi’s great work at her website.

Nomi Prins writes for Peak Prosperity:

Global central banks are afraid. Before Greece tried to stand up to the Troika, they were merely worried. Now it’s clear that no matter what they tell themselves and the world about the necessity or even righteousness of their monetary policies, liquidity can still disappear in an instant. Or at least, that’s what they should be thinking.

The Federal Reserve and US government led policy of injecting liquidity into the US and then into the worldwide financial system has resulted in the issuance of trillions of dollars of debt, recycling it through the largest private banks, and driving rates to 0% — or below. The combined book of debt that the Fed and European Central Bank (ECB) hold is $7 trillion. None of that has gone remotely into fixing the real global economy. Nor have the banks that have ben aided by this cheap money increased lending to the real economy. Instead, they have hoarded their bounty of cash. It’s not so much whether this game can continue for the near future on an international scale. It can. It is. The bigger problem is that central banks have no plan B in the event of a massive liquidity event.

Some central bank entity leaders have admitted this. IMF chief, Christine Lagarde for instance, warned Federal Reserve Chair, Janet Yellen that potential US rate hikes implemented too soon, would incite greater systemic calamity. She’s not wrong. That’s what we’ve come to: a financial system reliant on external stimulus to survive.’

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Greek Crisis Marks End of Debt Era

Atul Singh writes for Fair Observer:

[…] The Greek debt crisis is about to go global. First, other European countries are bound to be affected. Even France, la grande nation, will eventually come under pressure. Second, even states and cities will face pressure. Already, Puerto Rico’s government has declared that it cannot pay its $73 billion debt. In fact, all government-backed debt from sovereign to municipal bonds will come under pressure. Third, the US and China will eventually face a debt crisis too. The crisis is global and about to amplify.

The ballooning of debt is the biggest challenge facing the world economy. To stave off economic collapse, governments bailed out American and European banks. Central banks then released a torrent of money into the system by lowering interest rates and using quantitative easing, emulating the Bank of Japan. Those who own assets became richer, exacerbating already terrible inequality. Governments support creditors to boost economic confidence, while home owners in the US and ordinary citizens are fed to the dogs.

There is certainly a glut of savings in some parts of the world. China and Germany are awash with capital and are looking to park their money in assets that give them higher return. Yet there are limits to returns in a world awash with capital. The Chinese bubble in real estate and stocks has burst. Yet China is putting more money into its economy. It has made a fourth cut in interest rates since November and has reduced reserve requirements for banks, so they can continue lending. China has also lowered transaction fees and relaxed collateral rules on borrowing to fund share purchases. This is debt-fueled madness.

Like all parties, the Chinese one is coming to an end and stocks have lost nearly 25% of their value since the middle of June. Hence, Chinese money is flocking to the US in search of a safe harbor. Chinese buyers are now purchasing houses in California without even looking at them. China continues to fund US debt and shudders in horror as quantitative easing dilutes the value of its reserves. Unlike smaller countries like Greece, the US will never face default. It has the unique luxury of diluting its debt by simply printing more dollars. As the superpower in-charge of the world’s reserve currency, it can live off debt a little longer. It offers the greatest security to investors in an uncertain world. Yet the music will one day stop playing even for the US.’

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How Europe Played Greece

Alex Andreou writes for Common Dreams:

[…] Faith in European Institutions is thin on the ground. Lines have been crossed. At times of financial strain, a country’s currency issuer, its central bank, should act as lender of last resort and prime technocratic negotiator. In Greece’s case, the European Central Bank, sits on the same side as the creditors; acts as their enforcer. This is unprecedented.

The ECB has acted to asphyxiate the Greek economy – the ultimate blackmail to force subordination. The money is there, in our accounts, but we cannot have access to it, because the overseers of our own banking system, the very people who some months ago issued guarantees of liquidity, have decided to deny liquidity. We have phantom money, but no real money. There is a terrifying poetry to that, since the entire crisis was caused by too much phantom money in the first place.

EU Institutions are now openly admitting that their aim is regime change. A coup d’état in anything by name, using banks instead of tanks and a corrupt media as the occupiers’ broadcaster. The rest of Europe stands back and watches. Those leaders who promised the Syriza government support before the election, have ducked for cover. I understand it. They sympathise, but they don’t want to be next. They are honourable cowards. They look at the punishment beating being meted out and their instinct is to protect their own. ‘

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Joseph Stiglitz: How I would vote in the Greek referendum

Joseph Stiglitz, a Nobel laureate in economics, writes for The Guardian:

Alexis Tsipras, leader of the radical left main opposition party Syriza, greets supporters after a rally of the party in the northern Greek port city of Thessaloniki, January 2015. […] In January, Greece’s citizens voted for a government committed to ending austerity. If the government were simply fulfilling its campaign promises, it would already have rejected the proposal. But it wanted to give Greeks a chance to weigh in on this issue, so critical for their country’s future wellbeing.

That concern for popular legitimacy is incompatible with the politics of the eurozone, which was never a very democratic project. Most of its members’ governments did not seek their people’s approval to turn over their monetary sovereignty to the ECB. When Sweden’s did, Swedes said no. They understood that unemployment would rise if the country’s monetary policy were set by a central bank that focused single-mindedly on inflation (and also that there would be insufficient attention to financial stability). The economy would suffer, because the economic model underlying the eurozone was predicated on power relationships that disadvantaged workers.

And, sure enough, what we are seeing now, 16 years after the eurozone institutionalised those relationships, is the antithesis of democracy: many European leaders want to see the end of prime minister Alexis Tsipras’ leftist government. After all, it is extremely inconvenient to have in Greece a government that is so opposed to the types of policies that have done so much to increase inequality in so many advanced countries, and that is so committed to curbing the unbridled power of wealth. They seem to believe that they can eventually bring down the Greek government by bullying it into accepting an agreement that contravenes its mandate.’

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US Hedge Funds Get Bailed Out if Greeks Pass Bailout Referendum: Interview with Bill Black and Michael Hudson

‘Foreign banks want to bleed the patient when a policy of debt cutting and tax reform would revive the Greek economy, say UMKC’s Bill Black and Michael Hudson.’ (The Real News)

The IMF defaulted on Greece a long time ago

Jerome Roos writes for ROAR Mag:

Post image for The IMF defaulted on Greece a long time agoTuesday marked the deadline for Greece to transfer a 1.6 billion euro debt repayment to the IMF. The country’s Finance Minister Yanis Varoufakis had already announced that his government could not — and would not — pay. And so, at 6pm Washington-time, 1am locally, Greece officially defaulted on the IMF.

The default is an unprecedented event in the history of finance: never before has a developed country fallen into arrears on a loan from the Fund. Unsurprisingly, the international press is already conjuring up unflattering comparisons with notorious failed states like Zimbabwe and Somalia, which are among the few countries to have gone down the same path of utter financial ignominy. With all due respect for Zimbabwe and Somalia, the implication of this media narrative is clear: Greece is about to become a hopeless basket case.

In truth, superficial parallels like these are dangerously misleading. Not only do they compare apples and oranges; they also end up obscuring the IMF’s own role in the decimation of the Greek economy, which basically made an eventual Greek default inevitable. By uncritically reproducing narratives of Greece’s “failure” to repay the Fund, many in the international media are directly overlooking the fierce internal criticism that top IMF officials have expressed about their own responsibility for the utter disaster of the Troika’s bailout programs.’

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Will the Greek Referendum Force the Troika Back to the Bargaining Table? Interview with Dimitri Lascaris and Leo Panitch

‘Dimitri Lascaris and Leo Panitch discuss the possible consequences of a ‘no’ vote in the July 5th referendum on the bailout conditions offered by international creditors.’ (The Real News)

Joseph Stiglitz on the “criminal responsibility” of Greece’s creditors

Simon Shuster writes for TIME:

A few years ago, when Greece was still at the start of its slide into an economic depression, the Nobel prize-winning economist Joseph Stiglitz remembers discussing the crisis with Greek officials. What they wanted was a stimulus package to boost growth and create jobs, and Stiglitz, who had just produced an influential report for the United Nations on how to deal with the global financial crisis, agreed that this would be the best way forward. Instead, Greece’s foreign creditors imposed a strict program of austerity. The Greek economy has shrunk by about 25% since 2010. The cost-cutting was an enormous mistake, Stiglitz says, and it’s time for the creditors to admit it.

“They have criminal responsibility,” he says of the so-called troika of financial institutions that bailed out the Greek economy in 2010, namely the International Monetary Fund, the European Commission and the European Central Bank. “It’s a kind of criminal responsibility for causing a major recession,” Stiglitz tells TIME in a phone interview.

Along with a growing number of the world’s most influential economists, Stiglitz has begun to urge the troika to forgive Greece’s debt – estimated to be worth close to $300 billion in bailouts – and to offer the stimulus money that two successive Greek governments have been requesting.

Failure to do so, Stiglitz argues, would not only worsen the recession in Greece – already deeper and more prolonged than the Great Depression in the U.S. – it would also wreck the credibility of Europe’s common currency, the euro, and put the global economy at risk of contagion.’

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Greek debt crisis is the Iraq War of finance

Ambrose Evans-Pritchard wrote for The Telegraph earlier this month:

[…] If we want to date the moment when the Atlantic liberal order lost its authority – and when the European Project ceased to be a motivating historic force – this may well be it. In a sense, the Greek crisis is the financial equivalent of the Iraq War, totemic for the Left, and for Souverainistes on the Right, and replete with its own “sexed up” dossiers.

Does anybody dispute that the ECB – via the Bank of Greece – is actively inciting a bank run in a country where it is also the banking regulator by issuing this report on Wednesday [June 17]?

It warned of an “uncontrollable crisis” if there is no creditor deal, followed by soaring inflation, “an exponential rise in unemployment”, and a “collapse of all that the Greek economy has achieved over the years of its EU, and especially its euro area, membership”.

The guardian of financial stability is consciously and deliberately accelerating a financial crisis in an EMU member state – with possible risks of pan-EMU and broader global contagion – as a negotiating tactic to force Greece to the table.

It did so days after premier Alexis Tsipras accused the creditors of “laying traps” in the negotiations and acting with a political motive. He more or less accused them of trying to destroy an elected government and bring about regime change by financial coercion.’

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Fossil fuels subsidised by $10m a minute, says IMF

Damian Carrington reports for The Guardian:

Fossil fuel companies are benefitting from global subsidies of $5.3tn (£3.4tn) a year, equivalent to $10m a minute every day, according to a startling new estimate by the International Monetary Fund.

The IMF calls the revelation “shocking” and says the figure is an “extremely robust” estimate of the true cost of fossil fuels. The $5.3tn subsidy estimated for 2015 is greater than the total health spending of all the world’s governments.

The vast sum is largely due to polluters not paying the costs imposed on governments by the burning of coal, oil and gas. These include the harm caused to local populations by air pollution as well as to people across the globe affected by the floods, droughts and storms being driven by climate change.’

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Want to Help Nepal Recover from the Quake? Cancel its Debt, Says Rights Group

Kanya D’Almeida writes for IPS News:

[…] Questions abound as to how this impoverished nation, ranked 145 out of 187 on the United Nations Human Development Index (HDI) – making it one of the world’s Least Developed Countries (LDCs) – will recover from the disaster, considered the worst in Nepal in over 80 years.

One possible solution has come from the Jubilee USA Network, an alliance of over 75 U.S.-based organisations and 400 faith communities worldwide, which said in a press release Monday that Nepal could qualify for debt relief under the International Monetary Fund’s (IMF) new Catastrophe Containment and Relief Trust (CCR).

The IMF created the CCR this past February in order to assist poor countries recover from severe natural disasters or health crises by providing grants for debt service relief. Already, the fund has eased some of the financial woes of Ebola-impacted countries by agreeing to cancel nearly 100 million dollars of debt.

Quoting World Bank figures, Jubilee USA said in a statement, “Nepal owes 3.8 billion dollars in debt to foreign lenders and spent 217 million dollars repaying debt in 2013.”

Nepal owes some 1.5 billion dollars each to the World Bank and the Asian Development Bank, as well as 54 million dollars to the IMF, 133 million dollars to Japan and 101 million dollars to China.’

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The austerity delusion: The case for cuts was a lie. Why does Britain still believe it?

Paul Krugman writes for The Guardian:

[…] It is rare, in the history of economic thought, for debates to get resolved this decisively. The austerian ideology that dominated elite discourse five years ago has collapsed, to the point where hardly anyone still believes it. Hardly anyone, that is, except the coalition that still rules Britain – and most of the British media.

I don’t know how many Britons realise the extent to which their economic debate has diverged from the rest of the western world – the extent to which the UK seems stuck on obsessions that have been mainly laughed out of the discourse elsewhere. George Osborne and David Cameron boast that their policies saved Britain from a Greek-style crisis of soaring interest rates, apparently oblivious to the fact that interest rates are at historic lows all across the western world. The press seizes on Ed Miliband’s failure to mention the budget deficit in a speech as a huge gaffe, a supposed revelation of irresponsibility; meanwhile, Hillary Clinton is talking, seriously, not about budget deficits but about the “fun deficit” facing America’s children.

Is there some good reason why deficit obsession should still rule in Britain, even as it fades away everywhere else? No. This country is not different. The economics of austerity are the same – and the intellectual case as bankrupt – in Britain as everywhere else.’

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China-US Rivalry Front and Center of IMF Reform Debate

UK shift to China and AIIB “extremely worrying for Washington” – Interview with Liam Halligan

‘Liam Halligan, editor at large of Business New Europe and Telegraph columnist, talks to Going Underground host Afshin Rattansi about the Asian Infrastructure Investment Bank. He explains it is a rival to not only the IMF but also to the Asia Development Bank, which is Japanese-led. This is extremely threatening to the US as the BRIC countries wield a massive amount of power. There is a difference in the way that America and Britain see China, with the UK seeing them as a trading partner rather than a challenge. It is a symbolic move for Britain to back the AIIB, taking a step away from Washington towards a current that the US sees as a ‘major irritant.’ And he feels there is a growing argument that Britain’s future lies not in the West, with a failing Eurozone, but in a thriving Asian economy.’ (Going Underground)

IMF: Ukraine to get $40 billion bailout

DW reports:

The International Monetary Fund (IMF) and embattled Ukraine have reached an initial deal on a new financial rescue package worth $17.5 billion, a potential “turning point” for Kyiv, IMF chief Christine Lagarde confirmed on Thursday.

The IMF’s contribution is part of a total of $40 billion Ukraine is set to receive from the international community.

Talks on the country’s fourth bailout in 10 years had been underway in the Ukrainian capital for days after the last aid program from April 2014 failed to stabilize Ukraine’s finances as it battles pro-Russian separatists in the east.’

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Former IMF Chief Dominique Strauss-Kahn To Face Trial On Pimping Charges

Bilderberg and the Cult of Austerity

Andrew Gavin Marshall writes in the sixth part in his series on Bilderberg:

AusterityLeedsTxistockphotoE3x4-1‘It could almost be a slogan: Bilderberg brings people together. Specifically, every year, the Bilderberg Group holds secret, “private” meetings at four star hotels around the world, bringing together nearly 150 of the world’s most influential bankers, corporate executives, dynasties, heads-of-state, foreign policy strategists, central bankers and finance ministers. It also invites the heads of international organizations, think tanks, foundations, universities, military and intelligence officials, media barons, journalists and academics.

Participants at Bilderberg appreciate having a closed-door forum where they can speak openly and directly to one other – and of course, not to us. But perhaps we, the people, would also like to hear what they have to say. For the past four years, Bilderbergers have been running around the world preaching the gospel of “austerity” and “structural reform” – very important terms. If you don’t know what they mean, Bilderbergers are working their day jobs to make sure you will learn.’

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Trojan Hearse: Greek Elections and the Euro Leper Colony

Greg Palast writes:

‘Europe is stunned, and bankers aghast, that polls show the new party of the Left, Syriza, will win Greece’s parliamentary elections to be held this coming Sunday, January 25.

Syriza promises that, if elected, it will cure Greece of leprosy.

Oddly, Syriza also promises that it will remain in the leper colony.  That is, Syriza wants to rid Greece of the cruelty of austerity imposed by the European Central Bank but insists on staying in the euro zone.

The problem is, austerity run wild is merely a symptom of an illness.  The underlying disease is the euro itself.’

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What Is Causing Market Volatility? Interview with Leo Panitch

Editor’s Note: Professor Leo Panitch is a distinguished research professor of Political Science at York University in Toronto, Canada and editor of the Socialist Register. He is also co-author of ‘The Making of Global Capitalism: The Political Economy of American Empire‘.

China Steps In as World’s New Bank

William Pesek writes for Bloomberg:

Thanks to China, Christine Lagarde of the International Monetary Fund, Jim Yong Kim of the World Bank and Takehiko Nakao of the Asian Development Bank may no longer have much meaningful work to do.

Beijing’s move to bail out Russia, on top of its recent aid for Venezuela and Argentina, signals the death of the post-war Bretton Woods world. It’s also marks the beginning of the end for America’s linchpin role in the global economy and Japan’s influence in Asia.

What is China’s new Asian Infrastructure Investment Bank if not an ADB killer? If Japan, ADB’s main benefactor, won’t share the presidency with Asian peers, Beijing will just use its deep pockets to overpower it. Lagarde’s and Kim’s shops also are looking at a future in which crisis-wracked governments call Beijing before Washington. ‘

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IMF, World Bank, Giant Consultants Admit the Storm is Coming

Andrew Gavin Marshall wrote for Occupy back in July:

‘These two groups – financial institutions and the consultants that advise them – play key roles in the spread of institutionalized corporate and financial power, and as such, warnings from these groups about the threat posed by “social unrest” carry particular weight as they are geared toward a particular audience: the global oligarchy itself.

Organizations like the International Monetary Fund (IMF) and World Bank were responsible for forcing neoliberal economic “restructuring” on much of the developing world from the 1980s onwards, as the IMF and E.U. are currently imposing on Greece and large parts of Europe. The results have been and continue to be devastating for populations, while corporations and banks accumulate unprecedented wealth and power.

As IMF austerity programs spread across the globe, poverty followed, and so too did protests and rebellion. Between 1976 and 1992, there were 146 protests against IMF-sponsored programs in 39 different countries around the world, often resulting in violent state repression of the domestic populations.

These same programs by the IMF and World Bank facilitated the massive growth of slums, as the policies demanded by the organizations forced countries to undertake massive layoffs, privatization, deregulation, austerity and the liberalization of markets – amounting, ultimately, to a new system of social genocide. The new poor and displaced rural communities flocked to cities in search of work and hope for a better future, only to be herded into massive urban shantytowns and slums. Today roughly one in seven people on Earth, or over 1 billion, live in slums.’

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IMF’s Post-Crisis Austerity Call Mistaken, Internal Watchdog Says

Andrew Mayeda reports for Bloomberg:

The International Monetary Fund (IMF) logo is seen at the IMF headquarters building in Washington.‘The verdict is in on the International Monetary Fund’s call for government austerity in the aftermath of the 2008 financial crisis: bad idea.

Where the fund went awry was in its 2010 shift away from recommending government stimulus to calling for budget cuts in the biggest advanced economies, according to a report released today by the IMF’s internal watchdog, the Independent Evaluation Office. That turn was inappropriate given the global recovery’s modest pace, the report said.

The findings add credence to views of critics such as Nobel economics laureate Paul Krugman, who said in 2010 that austerity was a “terrible idea” at the time. The IMF has since shifted its position, calling on countries to step up infrastructure spending at its annual meeting last month.’

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