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January 20th, 2012 
FAKE NEWS for the Zionist agenda
Portugal, Spain, Italy, and perhaps eventually France, too, look set to fall
victim to exactly the same austerity trap, making it ever harder and more
expensive for them to fund themselves in financial markets.
To students of IMF interventions, the inconsistency in approach is glaring.
IMF programmes after a serious balance of payments crisis are nearly always
made conditional on a sharp devaluation, to help countries return to current
account surplus.
This vital element is for obvious reasons entirely missing from the eurozone
bail-outs, making it unlikely that they will succeed in returning member
states to economic health. Already, international support for future
bail-outs is slipping. The United States, by far the IMF’s biggest backer,
has made it abundantly clear that it will not be contributing to the $500
billion of extra funding the organisation says it needs to meet the
estimated $1 trillion of upcoming demand for bail-outs, much of it from the
eurozone.
This has left the IMF in the unusual and problematic position of having to
seek the extra finance from bilateral loans, rather than through the normal
quota system. Regardless of its loyalties to the European Union, Britain
must not allow itself to be drawn into this renewed quagmire of misdirected
IMF lending. True enough, no country has ever lost money by lending to the
fund. Its position as preferred creditor, and the certain knowledge that
countries which fail to repay their IMF loans will be shut out of the
international club for generations to come, has made default extremely
unusual.
Yet in this case, the IMF is lending to one of the world’s biggest and
wealthiest economic regions. The sums involved are consequently much larger.
The $30 billion Greek programme alone is already the biggest the IMF has
ever conducted. There are surely still bigger ones to come. And while the
bail-outs may buy a little time, they do not provide solutions. With
devaluation closed off, the eurozone periphery will struggle to return to
growth, a key prerequisite in a country’s ability to honour its debts. But
never mind the risk of default: it is morally repugnant that relatively poor
countries such as India and China are being asked to lend to the IMF to sort
out a mess that the eurozone is easily rich enough to clear up itself. There
is a sense in which Europe has made its own bed, and now must lie in it.
That, in any case, is increasingly the US view, as it progressively turns
westwards and inwards.
The bottom line is that an organisation designed to set distressed economies
back on the straight and narrow is instead being used to protect both the
sanctity of the euro and the single currency’s richer, northern creditor
nations from loss. This was surely not what the IMF’s creators had in mind.
Tempting though it is to see the IMF’s commitment to the euro as evidence of a
Franco-German takeover, it’s actually less sinister than that. It is to do
with fear of the catastrophic consequences of a disorderly break-up. These
fears also instruct the Coalition’s policy on further bail-outs.
Yet until there is recognition that the euro under the present framework, not
the fiscal profligacy of member states, is in fact the major part of the
problem, long-term solutions will remain elusive. Tough love, not more
bail-outs, is the appropriate IMF policy for Europe – forcing political
leaders to confront reality and the single currency’s northern states to
take their losses.
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