Friday, August 14, 2015

IMF: she leaves the ship? – TIME ONLINE

The federal government is afraid that the IMF chief, they can at the Greek bailout down.

IMF chief in Christine Lagarde and German Chancellor Angela Merkel

IMF chief in Christine Lagarde and German Chancellor Angela Merkel | © Reuters

Sometimes history condensed into a picture. Just as on that photo showing the former Indonesian President Suharto as he signed a credit agreement in a bent position. The former head of the International Monetary Fund (IMF) stands with his arms crossed next to and overlooking the statesman down. The photo was taken on 15 January 1998, Indonesia was about to go bankrupt and had to rely on help.

Angela Merkel had perhaps such a situation in mind when they prevailed five years ago, the IMF in the rescue Greece to participate – against the will of France. For the Chancellor of the Monetary Fund was a kind of extension of the German Federal Government. The IMF should teach the Greeks budgetary discipline, as he had been taught around the globe discipline since its inception more than half a century crisis countries.

But now hardly a day when the IMF chief Christine Lagarde not interfere with the new demands in the rescue policy – and almost all are unpopular in Angela Merkel’s great coalition: Lagarde wants debt relief for Greece, she wants the federal government to invest more, and they want the European Central Bank keeps interest rates low. The Desired partner – it is increasingly becoming the nemesis

In the coming week the Bundestag will decide on a third rescue package for Greece.. The consent is difficult many Union deputies, the savings requirements for Greece were softened because of the dramatic collapse of the economy. It is all the more important for the Union faction, that at least the IMF met the expectations placed in him. Another reason why the estrangement between Berlin and Washington is so politically explosive.

The history of this alienation begins in the late nineties. At that time, an aspiring German economist working in the Washington headquarters of the IMF. His name: Jens Weidmann. Weidmann – Today President of the Bundesbank. It is the time when the IMF is considered a stronghold of neo-liberalism. In Africa, Asia and Latin America, he is saving programs and free markets through – often, however, regardless of the social consequences. Later Weidmann is involved as Merkel’s chief economic advisor instrumental in the involvement of the IMF.

In Washington, the Germans open doors a race. There are bad times for the global financial guardian. Nobody wants to hear their advice – and due to strict austerity measures they see hardly buyers for their loans. The once powerful institution threatened with irrelevance. For more than a thousand mostly well-paid economists of the Fund it comes to existence. The IMF finances the operation – only the personnel and travel expenses add up to about one billion dollars a year – mainly through loan fees. If the loans fail, then there are also less fees. The participation in the multi-billion dollar rescue Greece is the view of the IMF, therefore, also: a roaring business

As with the roles you do not agree in Washington.. Economists have long since begun to draw lessons from the partially devastating consequences of classical Reform Programmes. Today, for example, is in the internal policies of the Fund that when drafting their attention to “impact on income distribution” of reform requirements is so that they do not meet the poorest of the poor. The adjustment programs were “no longer as hard as it used to,” said Marco Annunziata, chief economist at the Italian bank UniCredit. Even as 2010, the first rescue package with the Greeks will be negotiated, the experts of the Fund advocate to adopt the country some of its debt. You can not, however, prevail against the federal government, without running the risk of losing the major contract

driven this turnaround has above all a man:. Olivier Blanchard. The Frenchman leads the powerful research department of the IMF. In 2013 he published a study stating that ambitious austerity programs can be harmful for the economy. For the conservative IMF comes to a revolution.

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