Euro Area

[Fragony]

I wonder when the Army will take over? (again)

My dads making plans as we type to get the hell out of there. Paradise lost indeed.

You got a dad

[Nowake]

nothing you have said i disagree with, and it is very sad, but none of the above seems incompatible with what i said above.

Sorry to intrude, yet your statement is not necessarily true either

The lender wants their money back, with interest, so those conditions attached quite rightly include reforms that will drag the country back out of the p00p-hole.

First of all, Greece is a country, not merely a business. Even when a country defaults, its assets and policies are very much worth negotiating for. In order for lenders to recuperate their investments, they do not need Greece to remain solvent.

In the same way countries holding enough resources or the right resources can choose to nationalize properties of foreign investors whenever they like, indebted countries trying to maintain a credit line or simple remain in the international economic community are often forced to trade off part of their sovereignty. Property transfers, exploitative leases on assets or favourable economic policies towards private or state lenders can repay just as well, and more importantly, often much faster and reliably than should the lender wait for a country to get back on its feet. The only risk is social unrest -- and the French revolution is not guaranteed to be re-enacted; there are enough cases when social revolts were successfully nipped in the bud.

And even when they manifest scruples to imposing such measures, the commitments they will request will only ask for the country to remain solvent until debt is repaid, thus economic recovery in not guaranteed.
That is even more often occurring when a part of the lenders want and have the clout to enforce the preferential repayment of debt towards themselves first.

It's a principle very nicely put by good ol' Louis the XVth

Et après moi, le déluge

[Furunculus]

no, it is quite clear, the IMF is not obliged to lend to anyone, if you want its money you agree to its terms.

those terms are likely to include reforms that the IMF deem essential to encouraging the growth it beleives will maximise the chance of recieving back both the investment and interest.

a country doesn't have to accept those terms, it can say "no", in which case the IMF will say "no" too.

[gaelic cowboy]

no, it is quite clear, the IMF is not obliged to lend to anyone, if you want its money you agree to its terms.

Interestingly Ireland agreed totally with IMF terms but the ECB and EU rejected them and we got the bailouts we have now.

It seems like sometimes when you say YES ye still end up in the NO end

[Nowake]

no, it is quite clear, the IMF is not obliged to lend to anyone, if you want its money you agree to its terms.
those terms are likely to include reforms that the IMF deem essential to encouraging the growth it beleives will maximise the chance of recieving back both the investment and interest.
a country doesn't have to accept those terms, it can say "no", in which case the IMF will say "no" too.

That is a very simplistic view -- please, do not think I am implying you are simple in any way, I am merely stating that your opinion is perhaps uninformed, and thus limited. IMF's SAPs and their succesors, the PSRPs, are questioned even by IMF insiders; e.g. see this internal document:
The Effect of IMF and World Bank programmes on poverty which concludes that "the poor are better off without structural adjustment".

I glanced through this report I had bookmarked a while ago, wanting to extract a few cliff-notes for you, yet I find it rather difficult to do it while regaling you with the full picture it depicts, thus I will link it: Structural adjustment, a major cause of poverty. It contains a slew of links towards official documents or articles which further illuminate the issue under discussion.

Do peruse it and give me your views

And if you will allow me a cheap shot, one must never forget that both the IMF and the World Bank are institutions under the control of the G7, and while I am one of the least inclined persons to view these two institutions as mere economic instruments subservient to political pressure and I personally think part of their policies have indeed helped, it should be noted that managers in both organizations have been known to put national interests above those of their clients while in office. The cheap shot was me indulging in a bit of pitchfork-waving by quoting Larry Summers' view shared in an internal memo (then Chief Economist for the World Bank, then US Treasury Secretary in the Clinton Administration etc.):

Just between you and me, shouldn’t the World Bank be encouraging more migration of dirty industries to the LDCs [less developed countries]?… The economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable, and we should face up to that… Under-populated countries in Africa are vastly under-polluted; their air quality is probably vastly inefficiently low compared to Los Angeles or Mexico City… The concern over an agent that causes a one in a million change in the odds of prostate cancer is obviously going to be much higher in a country where people survive to get prostate cancer than in a country where under-five mortality is 200 per thousand.

— Lawrence Summers, Let them eat pollution, The Economist, February 8, 1992.

[Adrian II]

Surprise, surprise, Greece will reportedly fail its budget targets for 2011 and 2012. The reason: the recession is turning out worse than they thought.

Well, what did they think? Or did they think at all?

AII

[Furunculus]

That is a very simplistic view -- please, do not think I am implying you are simple in any way, I am merely stating that your opinion is perhaps uninformed, and thus limited. IMF's SAPs and their succesors, the PSRPs, are questioned even by IMF insiders; e.g. see this internal document:
The Effect of IMF and World Bank programmes on poverty which concludes that "the poor are better off without structural adjustment".

And if you will allow me a cheap shot, one must never forget that both the IMF and the World Bank are institutions under the control of the G7, and while I am one of the least inclined persons to view these two institutions as mere economic instruments subservient to political pressure and I personally think part of their policies have indeed helped, it should be noted that managers in both organizations have been known to put national interests above those of their clients while in office.

My apparently simplistic view does rather stem from the fact that you have misinterpreted what i said.
At no point have a i laid a value judgement on that the IMF does, i merely noted that if you wish its money then you agree to its terms.
Your own link states as much:

Only when governments sign this “structural adjustment agreement” does the IMF agree to:

Lend enough itself to prevent default on international loans that are about to come due and otherwise would be unpayable.
Arrange a restructuring of the country’s debt among private international lenders that includes a pledge of new loans.

If you will allow me a cheap shot, one must never forget that this conversation thread started further up this page with IA refuting the notion that the IMF was responsible for Greeces woes, by correctly pointing out that Greece's politicians are responsible for the pickle.
The flawed political-union that underlies this glorious currency-union is exactly the reason the IMF was the only possible solution that could have prevented the eurozone sliding beneath the waves in 2010 rather than 2012.

[phonicsmonkey]

If you will allow me a cheap shot, one must never forget that this conversation thread started further up this page with IA refuting the notion that the IMF was responsible for Greeces woes, by correctly pointing out that Greece's politicians are responsible for the pickle.
The flawed political-union that underlies this glorious currency-union is exactly the reason the IMF was the only possible solution that could have prevented the eurozone sliding beneath the waves in 2010 rather than 2012.

Ahem...while I am responsible for my rather glib comment being misinterpreted I should probably clarify. I was not laying the blame for Greece's woes at the door of the IMF but rather attempting to point out that its policies and the terms of its intervention have taken a sick patient and made it worse.

I think it is becoming increasingly clear that killing economic growth through externally-imposed austerity is serving nobody's interests, including Greece's creditors who seem to have lost sight of the principal investment while focusing too much on keeping interest payments current. Do they want to increase their chances of getting their money back?

Interesting to compare the current situation with the IMF's failed intervention in Argentina. A quick google search will find it for you but here is a snappy one-pager where some of the parallels are drawn out.

Furunculus, I think you and I largely agree on the causes of this situation. As I said before, it's a failure of political leadership across Europe and over many years that has brought us to this point. You are more apt to frame it in terms of a lack of representation, but I think it's just a different aspect of the same issue.

[Nowake]

Oh, I'm very sorry, perhaps I misunderstood (no sarcasm). The part of your statement with which I was disagreeing was the following:

The lender wants their money back, with interest, so those conditions attached quite rightly include reforms that will drag the country back out of the p00p-hole.

Basically, my point was that IMF's set parameters more often than not do not include reforms which are necessarily beneficial even in the acception of its own insiders, but rather an arbitrary and rigid set of rules which will sink the country even further down "the p00p-hole".

I do believe your turn of phrase denoted that, in its capacity as the lender, IMF's own interest would dictate that it will aim for a policy to rehabilitate the state. Which is demonstrably wrong in practice and its own economists criticised it for decades now. Genuine economic recovery by the state and the recovery of the loan by the IMF are not linked.
Hence the reports and documents I linked above

[InsaneApache]

You got a dad

Hasn't everyone?

[Ronin]

Hasn't everyone?

if you don´t you get to start your own religion.