Category Archives: IMF

Nobel Economist Joseph Stiglitz Hails New BRICS Bank Challenging U.S.-Dominated World Bank & IMF

‘A group of five countries have launched their own development bank to challenge the U.S.-dominated World Bank and International Monetary Fund. Leaders from the so-called BRICS countries — Brazil, Russia, India, China and South Africa — unveiled the New Development Bank at a summit in the Brazilian city of Fortaleza. The bank will be headquartered in Shanghai. Together, BRICS countries account for 25 percent of global GDP and 40 percent of the world’s population. To discuss this development, we are joined by Nobel Prize-winning economist Joseph Stiglitz, a professor at Columbia University and the World Bank’s former chief economist. “It’s very important in many ways,” Stiglitz says of the New Development Bank’s founding. “This is adding to the flow of money that will go to finance infrastructure, adaptation to climate change — all the needs that are so evident in the poorest countries. It [also] reflects a fundamental change in global economic and political power. The BRICS countries today are richer than the advanced countries were when the World Bank and the IMF were founded. We’re in a different world — but the old institutions haven’t kept up.”‘ (Democracy Now!)

Jim Rickards: BRICS Development Bank A Significant Step Away From The Dollar

China plans investment bank to break World Bank dominance

RT reports:

‘China is moving forward with a plan to create its own version of the World Bank, which will rival institutions that are under the sway of the US and the West. The bank will start with $100 billion in capital. The Asian Infrastructure Investment Bank (AIIB) will extend China’s financial reach and compete not only with the World Bank, but also with the Asian Development Bank, which is heavily dominated by Japan. The $100 billion in capital is double that originally proposed, the Financial Times (FT) reported.

A member of the World Bank, China has less voting power than countries like the US, Japan, and the UK. It is in the ‘Category II’ voting bloc, giving it less of a voice. In the Asian Development Bank, China only holds a 5.5 percent share, compared to America’s 15.7 percent share and Japan’s 15.6 share. At the International Monetary Fund, China pays a 4 percent quota, whereas the US pays nearly 18 percent, and therefore has more influence within the organization and where loans go. “China feels it can’t get anything done in the World Bank or the IMF so it wants to set up its own World Bank that it can control itself,” the FT quoted a source close to discussions as saying.’

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BRICS nations hope to bankroll a changing world order

Michael Pizzi writes for Al Jazeera:

‘After more than six decades of dictating development policy in much of the emerging world, the Western-led International Monetary Fund and World Bank may soon have some competition.

The BRICS nations — Brazil, Russia, India, China and South Africa — are reportedly close to finalizing their long-awaited development bank and currency reserve, each valued at $100 billion, in what has been billed as a historic challenge by the world’s emerging economies to a global financial architecture that has been dominated by the U.S. and Western Europe since its post–World War II inception.

The BRICS nations first announced their plans for the bank in March 2013 but struggled to reach an agreement over China’s desire to hold a greater stake in the institution. But a Brazilian government official told Reuters last week that the five members were ready to split funding and control equally, clearing the last major hurdle for a launch in 2016.

To economists in the developing world, who have long criticized the World Bank and IMF as anathema to the countries they purport to help, the New Development Bank holds tremendous promise. Critics say the West has taken advantage of its monopoly in international lending to wield outsize influence in the economic and political affairs of developing countries, dictating development models that further entrench these countries’ subservience to the West.

But unlike the U.S. and Europe, who are in lockstep on most things, the BRICS countries have little in common but a shared ambition to rebalance the global economic order.’

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Who’s in control – nation states or global corporations?

Gary Younge writes for The Guardian:

Greek newspapers are on display in Athen‘The night in 2002 when Luiz Inácio Lula da Silva won his landslide victory in Brazil’s presidential elections, he warned supporters: “So far, it has been easy. The hard part begins now.” He wasn’t wrong. As head of the leftwing Workers’ party he was elected on a platform of fighting poverty and redistributing wealth. A year earlier, the party had produced a document, Another Brazil is Possible, laying out its electoral programme. In a section entitled “The Necessary Rupture”, it argued: “Regarding the foreign debt, now predominantly private, it will be necessary to denounce the agreement with the IMF, in order to free the economic policy from the restrictions imposed on growth and on the defence of Brazilian commercial interests.”

But on the way to Lula’s inauguration the invisible hand of the market tore up his electoral promises and boxed the country around the ears for its reckless democratic choice. In the three months between his winning and being sworn in, the currency plummeted by 30%, $6bn in hot money left the country, and some agencies gave Brazil the highest debt-risk ratings in the world. “We are in government but not in power,” said Lula’s close aide, Dominican friar Frei Betto. “Power today is global power, the power of the big companies, the power of financial capital.”‘

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IMF Confirms $17bn Loan to Ukraine with Conditions That Will Devastate the Economy

From Scriptonite Daily:

‘Like many a nation before it, Ukraine is about to become a dependent of the IMF.  The IMF and the Ukrainian interim government  have agreed a $17bn loan over the next two years, together with a package of measure to hike up gas prices by 50%slash public spending, suspend the minimum wage and cut public sector wages. All before those pesky presidential elections at the end of May.

Ukraine’s budget deficit currently stands at 9%, it’s public debt at 41% of GDP and external debt at 79% of GDP. This isn’t great, but the US, the UK, Japan and Italy all have debts far in excess of Ukraine, exceeding 100% of GDP.

By the IMF’s own estimates, its programme of hiking up energy prices, cutting wages and depreciating the currency will result in a sharp contraction of the economy, a spike in inflation and an increase in the debt burden of the Ukraine:

In the current difficult environment, real GDP is expected to contract by about 5 percent in 2014 amid weak investor and consumer confidence. Inflation is expected to spike temporarily in response to the exchange rate depreciation and gas and heating tariff increases, reaching 16 percent at end-2014.

The currency devaluation and official borrowing (to help finance a still-wide government deficit) are expected to push public sector debt up to 57 percent of GDP and external debt to just below 100 percent of GDP.

Of course, it goes on to proclaim that in the medium term everything will right itself and things will improve.  but, it never does.  This is the same policy platform that decimated Greece, and much of the African and South American continents before it.

The game of the IMF is debt dependency, in order to asset strip the state for the benefit of Western speculators.  Ukraine is about to be torn to pieces by the vultures.’

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Serbia’s new PM pledges painful reforms with eyes on EU

Maja Zuvela and Ivana Sekularac report for Reuters:

Serbia’s parliament approved the cabinet of Prime Minister Aleksandar Vucic who took office on Sunday pledging deep economic reform and a drive to get the country into the European Union by the end of the decade. In March the 44-year-old Progressive Party (SNS) leader won the strongest popular mandate of any government since the days of Slobodan Milosevic, a leader during the wars of Yugoslavia’s demise in the 1990s that left Serbia isolated and bankrupt. One hundred and ninety-eight deputies in the 250-seat parliament voted for Vucic’s 19-member cabinet. Vucic said entry into the EU would be the government’s priority.

The former ultra-nationalist and Milosevic-era minister, who converted to the pro-EU cause in 2008, promised root-and-branch reform of the bloated public sector, pension system and labour law, as well as a cut of subsidies to loss-making state firms. His lead role in a much-publicized fight against crime and corruption, including the arrest and trial of influential Balkan retail tycoon Miroslav Miskovic, has vested him with popularity and helped him secure 158 out of 250 seats in the parliament.

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Guerrilla group says it carried out Greek central bank bombing

From Reuters:

An anarchist Greek guerrilla group has claimed responsibility for a car bombing at a central bank building in Athens two weeks ago. The dawn blast on April 10 caused no injuries but smashed windows in one of the busiest streets in the capital. It came hours before Greece tapped bond markets for the first time since its bailout began four years ago.

The Revolutionary Struggle militant group said in a document on an anti-establishment website the attack was a protest against Greece’s return to bond markets and proved the group was still active. In 2010, authorities said they had dismantled Revolutionary Struggle.

The group said the blast also targeted the office of the International Monetary Fund representative in Greece, housed in the central bank premises, and was a protest against a visit to Athens by German Chancellor Angela Merkel the next day. Revolutionary Struggle said the purpose of the attack was to awaken austerity-hit Greeks and topple the state.

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Ukraine’s IMF Deal: Heading Toward a Greece-like Depression?

Professor Jack Rasmus writes for Common Dreams:

Photo: REUTERS / Yiorgos KarahalisOn Thursday, the IMF released the broad outlines of its terms and conditions for loans and other measures for the Ukrainian economy. What those terms and conditions mean is less a rescue of the Ukrainian economy than the onset of a Greece-like economic depression for the Ukrainian populace.

Ukraine’s economy had clearly entered a recession, its third since 2008, sometime in the latter half of 2013.  Some recent estimates of the likely contraction of the economy in 2014-15 have ranged from 5%-15% in GDP decline.

The ‘IMF Standby Agreement with Ukraine’ text released March 27, acknowledges the current severe economic instability of the Ukrainian economy. What it fails to acknowledge, however, is how the IMF package will further adversely impact that economy.

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IMF boss Christine Lagarde quizzed by detectives in France over £270million corruption case involving French businessman

Peter Allen reports for the Daily Mail:

Questioned: IMF Christine Lagarde is being investigated over claims she abused her position as finance minister to help a controversial businessmanInternational Monetary Fund chief Christine Lagarde was today [Wednesday 19th] questioned by judges in Paris over a corruption scandal.

The Court of Justice of the Republic, a special tribunal qualified to judge the conduct of politicians, believe the 57-year-old may have abused her position as finance minister to help a controversial businessman.

Ms Lagarde is said to have allowed the equivalent of some £270million to be awarded to Bernard Tapie, a convicted football match-fixer and tax dodger who supported her governing UMP party.

It came on the day that the legal problems of Ms Lagarde’s former boss, ex-president Nicolas Sarkozy, deepened.

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Who In Ukraine Will Benefit From An IMF Bailout?: Interview with Michael Hudson and Jeffrey Sommers

Treasury Secretary: U.S. may lose clout at IMF due to refusal to OK reform

From Reuters:

The United States is hearing that its refusal to approve previously negotiated reforms for the International Monetary Fund could reduce the nation’s influence at the institution, Treasury Secretary Jack Lew said on Wednesday. U.S. lawmakers have been reticent to approve the IMF quota reforms that were agreed to in 2010 and would give developing countries a bigger say at the international lender.

The reforms would not reduce Washington’s power at the IMF, where the United States is the sole country with veto power. The Obama administration hoped Congress would tack approval of the IMF quota reforms onto legislation for an aid package for crisis-stricken Ukraine, but the outlook for that happening remains uncertain.

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Greg Palast: IMF’s four steps to damnation

Greg Palast wrote for the Guardian in 2001:

It was like a scene out of Le Carré: the brilliant agent comes in from the cold and, in hours of debriefing, empties his memory of horrors committed in the name of an ideology gone rotten. But this was a far bigger catch than some used-up Cold War spy. The former apparatchik was Joseph Stiglitz, ex-chief economist of the World Bank. The new world economic order was his theory come to life.

He was in Washington for the big confab of the World Bank and International Monetary Fund. But instead of chairing meetings of ministers and central bankers, he was outside the police cordons. The World Bank fired Stiglitz two years ago. He was not allowed a quiet retirement: he was excommunicated purely for expressing mild dissent from globalisation World Bank-style.

Here in Washington we conducted exclusive interviews with Stiglitz, for The Observer and Newsnight, about the inside workings of the IMF, the World Bank, and the bank’s 51% owner, the US Treasury. And here, from sources unnamable (not Stiglitz), we obtained a cache of documents marked, ‘confidential’ and ‘restricted’.

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The New Tyranny: How development experts have empowered dictators and helped to trap millions and millions of people in poverty

William Easterly published an excerpt from his new book ‘The Tyranny of Experts: Economists, Dictators, and the Forgotten Rights of the Poor’ at Foreign Policy:

On the morning of Sunday, Feb. 28, 2010, the villagers of Mubende District, Uganda were in church when they heard the sound of gunfire. They came out to find men torching their homes and crops. The soldiers held them off at gunpoint from rescuing their homes; one 8-year-old child was trapped and died in the fire. The soldiers then marched off the 20,000 farmers from the land that had been in their families for generations. The reason for the violence was that a forestry project financed by the World Bank wanted the land.

The only thing that distinguishes this episode from the many human rights violations that happen in the name of development is that it got unusual publicity. The New York Times ran a front-page story on it on Sept. 21, 2011. The World Bank the next day promised an investigation.  What is most revealing of all about this episode is what happened next: nothing. The World Bank never investigated its own actions in financing this project. Now, just after the fourth anniversary of the Mubende tragedy, it has been forgotten by nearly everyone except its victims.

The sad neglect of the rights of the poor in Mubende follows from the ideas behind the global war on poverty. Those who work in development prefer to focus on technical solutions to the poor’s problems, such as forestry projects, clean water supplies, or nutritional supplements. Development experts advise leaders they perceive to be benevolent autocrats to implement these technical solutions. The international professionals perpetrate an illusion that poverty is purely a technical problem, distracting attention away from the real cause: the unchecked power of the state against poor people without rights. The dictators whom experts are advising are not the solution — they are the problem.

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Ukraine has not experienced a genuine revolution, merely a change of elites

Volodymyr Ishchenko writes for the Guardian:

Two popular labels are being ascribed to events in Ukraine: it was either a democratic – or even social – revolution, or it was a rightwing – or even neo-Nazi – coup. In fact, both characterisations are wrong. What we have have seen is a mass rebellion, overwhelmingly supported in western and central Ukraine without majority support in the eastern and southern regions, leading to a change of political elites. But there are no prospects for democratic, radical change, at least under the new government. Why was it neither a social, nor democratic revolution? Some of the demands of the Maidan movement have been implemented. For example, the notorious Berkut regiment – the riot police who killed most of the dead protesters – was disbanded and the most odious of the former Yanukovych officials have been sacked.

However, this does not mean the start of systematic democratic change, or that the new government is in any way going to challenge the root of pervasive corruption in Ukraine: poverty and inequality. Moreover, it is likely only to aggravate these problems, putting the burden of the economic crisis on the shoulders of Ukraine’s poor, not on the rich Ukrainian oligarchs. The socioeconomic demands of the Maidan movement have been replaced with the neoliberal agenda of the new government. The cabinet, approved on Thursday, consists mainly of neoliberals and nationalists. Its official programme of action presented to parliament declares the need for “unpopular decisions” on prices and tariffs and its readiness to fulfill all the conditions of the loan from the International Monetary Fund.

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Washington’s Man Yatsenyuk Setting Ukraine Up To Be ‘Greeced’

Kenneth Rapoza writes for Forbes:

Ukraine’s interim prime minister, Arseniy “Yats” Yatsenyuk, may prove to be arsenic to the beleaguered nation. “Recall the phone exchange between the Ukraine ambassador and Victoria Nuland (Assistant Secretary of State for European Affairs) that got leaked out, where she basically said ‘we want Yats in there.’ They like him because he’s pro Western,” says Vladimir Signorelli, president of boutique investment research firm Bretton Woods Research LLC in New Jersey. “Yatsenyuk is the the kind of technocrat you want if you want austerity, with the veneer of professionalism,” Signorelli said. “He’s the type of guy who can hobnob with the European elite. A Mario Monti type: unelected and willing to do the IMFs bidding,” he said.

[...] Despite these ominous signs, Ukraine Ambassador Geoffrey Pyatt hailed the current crisis as “a day for the history books.” Most of the mainstream media have leaned decisively in the anti-Yanukovych camp. Ukraine’s new 450-seat parliament approved the appointment of the former Central Banker Yatsenyuk on Thursday by a vote of 371 to 1. Oddly enough, earlier this month, the pro-Western Yats trailed behind popular opposition leaders such as former heavyweight boxer Viltali Klitschko and the leader of the nationalist, Svoboda Party, Oleh Tyahnybok. But Yats had friends in high places and while he does not have strong support of the electorate, and would have no chance of winning an election, he is pro-IMF austerity and apparently the bulk of parliament is as well.

“Yatsenyuk was saying that what the Greeks did to themselves we are going to do ourselves,” said Signorelli. “He wants to follow the Greek economic model. Who the hell wants to follow that?” Also today, Yatsenyuk promised to implement “very unpopular measures” to stabilize the country’s finances. The government said it needs $35 billion to support the country over the next two years. His language in a news report broadcast by Bloomberg today indicates he is heading toward a potentially destabilizing austerity campaign

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Long Critical of Russia, West Mirrors Them in ‘New Ukraine’

Jason Ditz writes for Antiwar:

Historically the nation’s largest trading partner by far, Russia has been Ukraine’s go-to financier in times of trouble, a role that has often been criticized by Western nations as giving them undue influence over Ukraine’s internal affairs. Having just gone through an apparent regime change, which sent long-time Russian ally President Yanukovych into hiding, the United States and Britain are hoping to establish ties with the “new Ukraine” and, unsurprisingly, they’re going the exact same route Russia has.

US and British officials were quick to promise financial aid to “cushion the impact of reforms” by the new government, with Britain’s Chancellor George Osborne saying he was “ready with a checkbook” to rebuild Ukraine. Bizarrely, US officials interspersed their promises for aid with warnings to Russia not to “intervene militarily,” even though there has been no indication anyone had even raised that as a possibility.

Tunisia central bank ‘optimistic’ after IMF agrees loan

From AFP:

Tunisia’s central bank expressed “optimism” Thursday after the IMF released a delayed $506 million loan to support the fragile economy following major steps this week to end months of political turmoil.

The loan, part of a two-year, $1.76 billion (1.3 billion euro) package agreed last year, was approved by the International Monetary Fund on Wednesday after the new caretaker government of technocrat Prime Minister Mehdi Jomaa was sworn in.

The second tranche had been held up by the political instability that gripped Tunisia after the killing of two prominent opposition MPs last year, and also follows parliament’s adoption of a long-delayed new constitution on Sunday.

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IMF paper warns of ‘savings tax’ and mass write-offs as West’s debt hits 200-year high

From The Telegraph:

Much of the Western world will require defaults, a savings tax and higher inflation to clear the way for recovery as debt levels reach a 200-year high, according to a new report by the International Monetary Fund.

The IMF working paper said debt burdens in developed nations have become extreme by any historical measure and will require a wave of haircuts, either negotiated 1930s-style write-offs or the standard mix of measures used by the IMF in its “toolkit” for emerging market blow-ups.

“The size of the problem suggests that restructurings will be needed, for example, in the periphery of Europe, far beyond anything discussed in public to this point,” said the paper, by Harvard professors Carmen Reinhart and Kenneth Rogoff.

The paper said policy elites in the West are still clinging to the illusion that rich countries are different from poorer regions and can therefore chip away at their debts with a blend of austerity cuts, growth, and tinkering (“forbearance”).

The presumption is that advanced economies “do not resort to such gimmicks” such as debt restructuring and repression, which would “give up hard-earned credibility” and throw the economy into a “vicious circle”.

But the paper says this mantra borders on “collective amnesia” of European and US history, and is built on “overly optimistic” assumptions that risk doing far more damage to credibility in the end. It is causing the crisis to drag on, blocking a lasting solution. “This denial has led to policies that in some cases risk exacerbating the final costs,” it said.

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The IMF Wants You To Pay 71% Income Tax

From Sovereign Man:

The IMF just dropped another bombshell.

After it recently suggested a “one-off capital levy” – a one-time tax on private wealth as an exceptional measure to restore debt sustainability across insolvent countries – it has now called for “revenue-maximizing top income tax rates”.

The IMF’s team of monkeys has been working around the clock on this one, figuring that developed nations can increase their overall tax revenue by increasing tax rates.

They’ve singled out the US, suggesting that the US government could maximize its tax revenue by increasing tax brackets to as high as 71%.

Coming from one of the grand wizards of the global financial system, this might be the clearest sign yet that the whole house of cards is dangerously close to being swept away.

Think about it– solvent governments with healthy economies don’t go looking to steal 71% of people’s wealth. They’re raising this point because these governments are desperate. And flat broke.

The ratio of public debt to GDP across advanced economies will reach a historic peak of 110% next year, compared to 75% in 2007.

That’s a staggering increase. Most of the ‘wealithest’ nations in the West now have to borrow money just to pay interest on the money they’ve already borrowed.

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IMF Floats Idea To Levy 10% Tax On European Assets

imf

From Ben Swann:

The IMF’s Oct. 13 report, “Fiscal Monitor -Taxing Times”, discusses how to solve Europe’s sovereign debt problem.

What they recommend is shocking to some, and ringing alarm bells around the finance world.

Sovereign nations are facing shortages of tax revenues, and public finance is in shambles.  Multi-national corporations have offshored their assets to avoid paying taxes.   The IMF report addresses ideas of how to tax the dodgers that are hurting public finance.

FULL ARTICLE…

Obama halted NSA spying on IMF and World Bank headquarters

From Reuters:

President Barack Obama has ordered the National Security Agency to stop eavesdropping on the headquarters of the International Monetary Fund and World Bank as part of a review of intelligence gathering activities, according to a U.S. official familiar with the matter.

The order is the latest move by the White House to demonstrate that it is willing to curb at least some surveillance in the wake of leaks by former NSA contractor Edward Snowden of programs that collect huge quantities of data on U.S. allies and adversaries, and American citizens.

The NSA’s surveillance of the Washington-based IMF and World Bank has not previously been disclosed. Details of such spy programs are usually highly classified.

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Grenada’s IMF Sunday School

From IPS:

As the International Monetary Fund shares initial proposals for Grenada’s debt restructuring during the Washington DC meetings this week, the Caribbean island could gain a reputation for more than nutmeg, calypso, beaches and the 2012 gold medal sprinter Kirani James.

Because Grenada is listening to the nation’s religious leaders, it may become famous for a debt resolution deal that includes the participation of its citizens, protects the most vulnerable from austerity programmes and keeps current employment on the island intact.

Part of what could make possible protecting jobs and the island’s social safety net is curbing corporate and professional tax avoidance in Grenada.

The most interesting part of what propelled this debt deal is that the churches of this tiny island have staked a place at the negotiating table. On this island nation of 100,000 people, where most people on the street are debating any debt deal, religious institutions have taught or served a significant portion of the island’s government leaders.

As in so many parts of the world, often religious groups are the primary social service providers and in the case of Grenada they’ve earned the people’s respect.

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IMF sees epic change in world economy

From The Financial Times:

The global economy is experiencing “transitions on an epic scale”, the International Monetary Fund managing director said on Thursday, warning that turbulence in emerging markets could knock 0.5 to 1 percentage point off their growth.

Christine Lagarde’s remarks show the damage done to emerging markets by a recent round of “taper talk”, over the possibility of the US Federal Reserve slowing the pace of its asset purchases and their vulnerability to future changes in the pattern of global capital flows.

“The immediate priority is to ride out the turbulence as smoothly as possible,” said Ms Lagarde. “Currencies should be allowed to depreciate. Liquidity provision can help deal with dysfunctional market behaviour. Looser monetary policy can also help.”

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IMF issues warning on South African economy

From AFP:

The International Monetary Fund warned Tuesday that South Africa is trailing other emerging markets and must quickly implement reforms if it wants to avoid crisis.

The IMF, in an annual report on Africa’s largest economy, pointed to painfully high unemployment and a plethora of other economic troubles staking the country.

[...] Unemployment is officially at 25 percent, but is closer to 35 percent including those who have given up looking for work. Around 50 percent of all young people are without a job.

While South Africa has made “important strides” to correct disparities caused by decades of apartheid rule, the Washington-based institution said systemic problems have “come to the fore” in recent years.

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Hungarian PM warns investors ‘colonisation’ is over, pays off IMF debt, may eye EU exit

From bne:

Hungarian Prime Minister Viktor Orban launched another broadside against foreign investors and media on September 9, warning that the era of “colonisation” is over. The heightened rhetoric ahead of the elections next year will only raise worries amongst investors.

Orban and his ruling Fidesz party have been campaigning for some weeks now as they push to try to recapture the constitutional majority currently enjoyed at elections to be held in the spring at the latest. Opening the autumn session of parliament, the PM both boasted of his government’s economic prowess, reiterated promises to cut energy bills, and continued the pressure on the banks to take more losses from their foreign-currency loans.

“Hungary is an independent, sovereign country,” Orban proclaimed as he set out the agenda for the parliamentary session. “The era of colonisation is over. Utility price cuts, the elimination of the foreign currency loan regime and rescuing families and their homes are national causes for us.”

The resumed attack on the banks is the most immediate issue affecting investor confidence. As bne has reported, Fidesz effectively launched its election campaign in a sudden move in July, as it reopened an issue it had previously said was not in its plans. However, forcing the banks to shoulder more big losses from the hundreds of thousands of mortgage loans made in Swiss franc and euro should offer a clear populist boost at the polls.

Previously full of rhetoric concerning “negotiations” with the banks, the government upped the ante in early September. Following up ultimatums issued by officials, Orban told the lower house: “The banks abused their own position and [exploited] the people’s naivete. They were propagating [forex-based] loans while they were aware of the potential risks. They knew exactly what would happen if exchange rates went haywire, they [played down] the risks to customers in advance, [and] they made a deal that meant a huge profit only for them.”

Repeating a chilling new demand that the banks should be ready to absorb the bulk of the losses in phasing out such forex loans, the PM added: “It is a moral obligation of the banks to modify the [loan/mortgage] contracts. We are calling on the banks to bear most of the losses stemming from the exchange rate changes themselves. If they do not comply voluntarily by November 1, the government will take steps [to do so].”

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Richest 300 Persons on Earth Have More Money Than Poorest 3 Billion ~ Truthout

dumpphil7 17Truthout

As we repeatedly focus on wealth inequality in the United States (i.e.; just four hundred persons in the US have as much in assets and income as the bottom 50% of Americans), a video points out the even more extreme global wealth disparity.

There are many reasons for this.  Take for example institutional sources that contribute to this trend.  The World Bank, for interest, oversees “loans” to developing nations.  But by creating long-term indebtedness, these struggling counties end up owing at least $600 billion dollars in interest on loans whose principals have, in essence, already been paid off in actual dollars.

These usorious interest rates end up in the hands of the bankers and the shareholders of the financial institutions that are inter-related with the World Bank through the nations that govern it, particularly the United States which calls the shots.  Criticisms of the World Bank focus on how it creates financial conditions that result in debt dependency of the nations that borrow from it, therfore negatively impacting the economic prospects of the vast majority of its residents.

Trade agreements and global corporate exploitation of international monetary regulations provide resources and cheap labor to developed nations, while leaving poorer countries depleted. Is it possible that rich countries have increased the wealth gap from being 35 times greater during European colonialization to 80 times greater today? The video Global Wealth Equality contends that is the case.

FULL ARTICLE @ TRUTHOUT

EU commissioner calls for troika to be abolished ~ Reuters

European Union Justice Commissioner Viviane Reding addresses the European Parliament's Committee on civil liberties, justice and home affairs in Brussels June 19, 2013. REUTERS/Francois LenoirReuters

EU Justice Commissioner Viviane Reding called on Tuesday for the “troika” of the European Commission, the European Central Bank and the International Monetary Fund (IMF) to be dissolved.

“The time of the troika is over,” Reding said in a text of the main messages she gave at a citizens’ dialogue in Heidelberg in south-western Germany.

“Getting the IMF on board in recent years was an emergency solution. In future, we Europeans have to be able to resolve our problems on our own,” Reding, who is also vice-president of the European Commission, added.

The troika negotiates with countries in crisis, such as Greece, Portugal and Ireland, on austerity and reform measures they have to undertake in return for bailouts. It also supervises the implementation of such steps.

Reding said European institutions could manage this without the IMF.

FULL ARTICLE @ REUTERS

New Egypt PM & Army Set To Keep Egypt on Neo-Liberal Track ~ The Real News

Greece secures €6.8 billion bailout tranche ~ France 24

France 24

Eurozone finance ministers agreed Monday [July 8th]  to unlock billions of euros in fresh aid for Greece on condition it press ahead with urgently needed reforms.

The Eurogroup ministers, holding their last meeting before the summer break which was also attended by IMF chief Christine Lagarde, agreed to pay out 6.8 billion euros in fresh aid to Athens.

However, the funds would not be handed over in one lump sum, but in different instalments subject to certain conditions being met.

FULL ARTICLE @ FRANCE 24