Let’s not expect rapid changes in IMF operations says a director
Saint Petersburg, June 20 – The IMF’s Managing Director Christine Lagarde is chasing down billions and billions of euros that her financial institution gifted to Greece over the decades.
Russia’s international media broadcaster RT caught up with one of the IMF’s 24 executive directors that look over daily operations. Paulo Noguiera Batista was in Saint Petersburg at an International Economic Forum.
The one where CBS Morning Show anchor Charlie Rose asked Soviet leader Vladimir Putin if his country wanted to be a great power again.
Director Batista says – not surprisingly – that the organization that he helps oversee has pretty much failed in Ukraine and Greece.
“There are cases which are very difficult, or failures. I think Greece is one of them. Perhaps Ukraine is also another. Ukraine has had in the recent past as many as three unsuccessful programs – 2008, 2010, and 2014. And it’s now executing a fourth program with the IMF.”
An analysis by RT found that: “Ukraine’s total debt stands at above $50 billion and the government plans to restructure $22 billion provided by private lenders.
It will be able to unlock $17.5 billion in IMF aid if it manages to make enough spending cuts to achieve budgetary savings of $15.3 billion over 4 years.”
IMF Director Batista said it took the Greeks five years to vote out of power the parties that handled the financial crisis to the detriment of country.
Well, that’s because Brussels in collusion with the German financial barons was handing out lotsa cash to Greece without putting in place a public works program to build up the infrastructure.
The deutschmarks all basically went to pay widows pensions.
And to the local bank that kept figuring it had to recapitalize itself for some reason all the time.
Brussels and the European Union is not so much a governing body of human ideals as it is a transactional financial institution that regulates the distribution of wealth.
Brussels does not nurture leaders with vision. It’s just a bunch of high paid number crunchers with advanced degrees.
“The Greeks are suffering a lot from misguided decisions that were taken not only by the IMF,” says Director Batista. “But also by the previous Greek governments, by the European authorities, which led Greece to a serious impasse.”
The way it works for the IMF, the director said, is sorta complicated:
The 24 IMF executive directors can take the cash it assesses the rich countries and hand it over to the financially messed up country “provided that the country in question is engaged in good faith negotiations with the creditors.”
Real complicated stuff this money transfering.
Recall that in Ireland there was all that wild property speculation, banking scandals, outlandish mortgage lending.
Sorta like in the U.S. after Congress deregulated finance.
Director Batista says the IMF isn’t always consistent with the rules because his organization applies them with flexibility.
And the shareholders – that would be the countries giving over to the fund the most cash – can find “a window for political interference on the part of major shareholders.”
This interference does happen occasionally he says.
But like a good bureaucrat Batista told RT that IMF is slowly adapting to the international changes going on these days. And, yes, IMF does need to reform.
Picture of the shareholders is set up.
What Director Batista is refering to here is the roadblock the U.S. Congress has thrown up against the overwhelming majority vote by the IMF member nations to reform the organization.
More specifically to give the developing countries – the ones that mostly take in the cash – to give them more say so in the governing structure that does the passing out of the cash to them from countries like – well – the U.S.
The other reform is gonna be a new rule that the shareholders can assess the U.S. for more donations than the U.S. wants to – well – donate.
Director Batista continues:
“IMF is developing rather slowly to a rapidly changing world. It’s a large bureaucracy, 70 years old. So it’s even unfair to expect a bold move from this old lady in Washington DC. “
“It must reform its governance, voting power structure. It must abandon certain absurd rules that make for example the number one position of the fund – that of a managing director [that would be French lady Christine Lagarde] – be reserved for European nationals.”
“All of this should be rethought.”
Rome finally got a Papa from the Americas. Now maybe New Zealand can run the IMF.