ORIGINAL FRENCH ARTICLE: Le FMI en rêvait, l’Europe l’a fait
by Pierre Ivorra
Translated Tuesday 6 April 2010, by Henry Crapoand reviewed by
A dramatic turn in the history of the Euro zone: the IMF, the United States’ strike force, has been called to the rescue of Greek public finances. Who’s next?
Attac France called it “A historical break” in a press release on March 26. For the first time the euro zone has asked the IMF to help sort out Greece’s financial difficulties. European leaders try to play the event down but the precedent may have serious consequences. For it shows up the failure of the euro monetary union that was supposed to enable Europe to break free from the dollar’s hegemony. Fancy the US turning to the IMF to solve California’s difficulties!
The IMF already has a solid reputation. It made a name for itself in developing countries but its influence has spread wider since. In recent years it has taken a keen interest in Europe. In a text issued in November 2007, just before the crisis, it pleaded with the EU to give pride of place to financial markets (which are dominated by the US and responsible for the crisis) and to the banks. It also recommended “in order to keep down the onus of an aging population on budgets” “to set more ambitious objectives to public finance control by giving top priority to the reduction of expenses.” Now that the EU summit has given it the green light the IMF will be in a position to monitor the implementation of its own recommendations.
In Eastern Europe, IMF experts have organized the transition by allowing foreign (Western and US) banks and multinationals to pull off a real takeover bid. The IMF itself confessed that those countries’“dependency on foreign banks has signally increased”, so much so that they found themselves stripped naked when the financial crisis broke out and those financial institutions themselves withdrew their capital. Being completely strapped for cash, on the verge of bankruptcy, who could they appeal to outside the IMF? And sure enough, in Hungary, Rumania, Poland, and the Baltic States, the IMF used its steamroller tactics and cut social contributions.
This shows that in the Eastern countries as well as in the West, another European monetary construction must roll the financial markets back in order to meet the peoples’ needs; another international monetary system must be set up, especially by reforming the IMF, reducing the hegemony of the US and of the dollar over it, and substituting a new universal currency for cooperation instead of the green currency.