The mere thought of the new Greek Syriza finance minister Yanis Varoufakis meeting in April 2015 with IMF officials in Washington sent global stock and bonds markets tumbling. The IMF is Greece’s key creditor.
Words from Poul Thomsen – director of the IMF’s European department – didn’t help either. Thomsen admitted that even IMF forecasts for growth in Greece were unrealistic.
“Our growth projection for this year will clearly have to be revised down significantly because of the current turmoil, because of the delay in completing the review. So once again, growth will under-perform,” Thomsen told CNBC from the IMF’s annual Spring Meeting in Washington D.C.
Thomsen is in charge of the IMF’s loan programs to Greece and Portugal. He told CNBC that the situation with Athens was “complex” because the new left wing Syriza government is insisting on doing things “differently” from their predecessors.
“I don’t think there is any loss of patience in the negotiations but it is a complex situation, let me explain. The Greek population wants to do things differently. They have elected a government that wants to do things differently. We have worked to accept that. Absolutely there are always different ways of achieving a program’s objective, so we are engaged in a discussion of trying to do it quite differently,” he said.
Wall Street and the City of London aren’t too keen on doing things differently. The elite worry that should Syriza be allowed to dictate economic demands to the IMF, this would set a very bad precedent.
Yet if they do not accede to Greek demands, the country – which some say is already bankrupt – may well be forced to leave the European Union to survive. This would come with a repudiation of some debt, which is why Greek bonds are hovering near 13 %.
The situation in Greece is but a microcosm of what the banksters face regarding the entire global economy. The developed nations have nearly all followed the well-worn path of financialization, privatization and lassie faire capitalism in a race to the bottom for global workers.
Benefits have been stripped, wages have stagnated and underemployment is chronic. Yet most Western governments continue to lurch politically to the right.
Meanwhile, the elite continue to amass even greater wealth, as concentration across various industrial, retail and financial sectors continues apace.
Something’s gotta’ give.
Today it was the global stock and bond markets. The Dow closed down 279 points.
As concentration of economic power reaches levels not seen since medieval Europe, there will be many more crises like Greece. In the end, unfettered capital self-destructs into a gaudy carnival of trusts and oligopolies. Competition and innovation cease. Jobs go away. People get hungry. Then trouble starts.
Leave it to the always persnickety Greeks to start the trouble.
Dean Henderson is the author of five books: Big Oil & Their Bankers in the Persian Gulf: Four Horsemen, Eight Families & Their Global Intelligence, Narcotics & Terror Network, The Grateful Unrich: Revolution in 50 Countries,Das Kartell der Federal Reserve, Stickin’ it to the Matrix & The Federal Reserve Cartel. You can subscribe free to his weekly Left Hook column @www.hendersonlefthook.wordpress.com