An IMF “useful again”, but for whom?

An IMF “useful again”, but for whom?

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If the IMF effectively promoted some social buffers in late 2008 after the bankruptcy of the Lehman Brothers bank, it was in accordance with the wishes of George W. Just the opposite of the current IMF.

In less than a week Dominique Strauss-Khan resigned from the IMF and Christine Lagarde is almost enthroned as the Europeans' candidate for the general leadership. During this week many chroniclers have presented a flattering summary of DSK's performance at the IMF. From the surprisingly qualified mandate of "exceptional" by Bernard Maris in France Inter on May 20, 2011 (1), to the editorials of the daily Le Monde whose website offers, for example, the reading of an article entitled "Dominique Strauss-Kahn it leaves a useful IMF again ”(2), the tone is globally positive. However, a very critical assessment of the actions of the IMF and its director general DSK is imposed.

The IMF has been saved again. Starting in 2004, the significant increase in raw material prices led to a clear growth in the foreign exchange reserves of developing countries, which in 2008 reached three times those of Japan, Western Europe and North America combined. Many countries in the South used them to repay their debts to the IMF in advance, thus reducing their dependence on it. In other words, its usefulness was not unanimously appreciated in the countries of the South, not even among leaders unwilling to fight neoliberalism. Discredited by the social disaster of the policies imposed on the South, the IMF, however, has taken advantage of the crisis that erupted in 2007-2008 to establish itself and generalize the same dire policies in the North. Without being exhaustive, let us take some European examples to show that the IMF has recovered its activity and its actions are, above all, harmful to the people.

In October 2008 a plan for Hungary of 20,000 million euros was decided, of which the IMF contributed 12,300 million, but the conditions were very severe for the population: increase of 5 points of VAT, up to 25%, the legal age of retirement at 65 years of age, freezing of the salaries of civil servants for two years, suppression of the extraordinary pay of retirees, reduction of public aid to agriculture and public transport. But the 2011 budget vote, which included a tax on bank turnover and a temporary tax hike on multinationals operating in Hungary, so that everyone would more or less contribute to the effort, angered the public. markets and the rating agency Fitch lowered Hungary's note, stating that the government "has laid the foundations for a budget bill that goes in the wrong direction." However, that budget clearly intended to restore the public deficit to 3% in 2011, so the disagreement does not refer to the objective to be achieved, but to the way to achieve it.

The following month Ukraine fell into the clutches of the IMF. In exchange for a loan of $ 16.4 billion, the Ukrainian parliament is forced to adopt a draconian "rescue" plan of privatizations and budget cuts. Ukraine must delay the retirement age of women from 55 to 60 and raise the gas tariff by 20%. But the 11% rise in the minimum wage worries the IMF, which blocks its program and DSK declares: “A recent mission of the Fund in Ukraine has concluded that policies in some areas, such as the new minimum wage law, threaten the stability »of the country. Recall that DSK raised his own salary by more than 7% when he became head of the IMF (3).

After registering a growth rate of 10% on average between 2003 and 2007, Latvia experienced a severe recession, and in December 2008 the IMF, the European Union and the Nordic countries pledged to inject 7.5 billion euros. Instead of affecting the capital gains and wealth of the richest, it was the workers, retirees and the unemployed who were imposed a two-year austerity cure coupled with a cut in spending equivalent to 15% of GDP. Salaries were reduced by 20% in the civil service, pensions by 10%. In December 2009, the Constitutional Court of Latvia ruled unconstitutional the reduction of retirement pensions demanded by the IMF, in violation of the right of individuals to social security. However, austerity continued and the IMF welcomes the "extraordinary efforts" carried out to recover growth thanks to competitive exports, through a reduction in wages that could reach up to 80%! Schools and hospitals close by the dozen and VAT went from 18% to 22%, while companies benefit from one of the most advantageous tax rates on profits in the European Union (15% compared to 23.5% on average).

Strongly shaken by the crisis, Greece has also received the landing of the IMF, which on May 9, 2010 gave its agreement to an «emergency» loan of 30,000 million euros in three years. The situation is further aggravated by state manipulations that made it possible to disguise the real figures of indebtedness with the complicity of the Goldman Sachs bank, which advised the government at the same time that it reaped juicy profits by speculating on the bankruptcy of the country! In February 2011, after several series of terrible austerity measures, the EU and the IMF demanded a reduction of 1.4 billion euros in health costs while a hundred doctors camped out before the Ministry of Health in Athens. The objective of the privatization of public goods of the State was revised upwards, going from 7,000 million euros of income between now and 2013 to 50,000 million between now and 2015. Now the objectives are ports, airports, railways, electricity and the tourist beaches of the country.

Iceland, Romania, Ireland, Portugal and so many other countries follow an identical logic. Faced with this, as happened a few months ago in Tunisia and Egypt, popular resistance is reinforced, such as the Spanish initiative to occupy Puerta del Sol and all the large squares to oppose the austerity that enriches the bankers responsible for the crisis and harshly punishes the populations, which are the first victims. But the IMF does not deviate from its trajectory. Far from serving the interest of the populations affected by the crisis, the IMF is at the service of the great powers and the multinationals, especially the large private financial companies.

If the IMF effectively promoted some social buffers in late 2008 following the bankruptcy of Lehman Brothers, it was in accordance with George W.'s wishes. But since mid-2009 the shock strategy has been widely applied. The shock of a great crisis that has been used to impose measures of social regression impossible to apply in normal times. Therefore Strauss-Kahn is far from the "New Keynesian" they would have us believe.

In this context, if we look at the living conditions of the most disadvantaged, whose improvement should guide any policy worthy of the name, it is not possible to say that the IMF "is useful again." Just the opposite of the current IMF ...

Jérôme Duval, Damiel Millet Y Eric Toussaint They are members of CADTM. Next publication: La Dette ou la Vie, Aden-CADTM, June 2010.

Translated for Rebellion by Caty R.



(2) Jean-Baptiste Chastand, May 19, 2011, http: // ... .. See also the articles by Alain Faujas

(3) His annual salary in 2010 was € 441,980, not counting an allowance of $ 79,120 for entertainment expenses

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