IMF board approves nearly $40 billion Greece loan

Source: AP

WASHINGTON – The International Monetary Fund has put up nearly $40 billion to help bail out Greece and appease investors' fears of a spreading European debt crisis.

The IMF's executive board met in Washington Sunday to approve a three-year, euro30 billion loan for the debt-plagued nation, part of a $140 billion package (euro110 billion) negotiated with other eurozone countries.

With hundreds of billions in debts and a budget deficit of 13.6 percent of gross domestic product, Greece was just weeks away from default when eurozone finance ministers agreed to activate a rescue. Greece has enacted tax hikes and deep cutbacks in government spending as a condition of the bailout. The austerity measures have sparked riots and social unrest in the nation.

"The Greek government should be commended for committing to an historic course of action that will give this proud nation a chance of rising above its current troubles and securing a better future for the Greek people," IMF Managing Director Dominique Strauss-Kahn said in a statement Sunday.

Read more: http://news.yahoo.com/s/ap/20100509/ap_on_bi_ge/us_greece_imf

When you cause a depression with draconian IMF austerity measures.

Best bet for the greeks, chase all the foreign bankers out of their country.

The IMF is an evil organization. I hope the Greek people eat their representatives on open spits.

Who is sovereign in Greece, the people or the government? It is clear that the government lacks the support of the people, it is therefore ipso facto illegitimate, and it's debts are worth doodle.

after they default on all that illegitimate debt? Life does go on after all.

The idea is to live within your means, is it not? Is bankruptcy not all about a fresh start?

But I suspect that this will have a devastating effect on the Greek economy. Consider all the US government subsidies - I suspect that Greek companies are also highly dependent on government money. The risk is that their economy will simply slip into a deeper recession. I can't see how that is going to benefit the Greek workers - they still will lose their benefits.

But that isn't the question, the question is whether the IMF bailout will help anybody but the banks that loaned them the money they cannot repay now, and the answer is no.

You simply cannot cure a consumer driven recession by cutting wages and raising taxes. This foolish idea has never worked. The IMF has a history of utter failure with these austerity plans. Take a look at their record in Africa or anywhere else.

I submit that NO, NO it is NOT a sensible way to solve the problem.

and everyone knows it but the reality deniers refuse to accept it.

You have an entity that is over leveraged and cannot afford to take on more debt, so the solution is to give them more debt.

You have to remember that these are the same geniuses who came up with TARP and Quantitative Easing in the US.

The problem with people defaulting is they had more debt than they could realistically ever afford, the solution was to try to get banks lending again.

If one actually cares about the Greeks, it's easy enough and not that expensive to supply food, fuel, things like that in kind, as an act of charity, and it doesn't cost anything like $130B.

It's just that the neo-liberal IMF lunatics don't like it very much because it strips of them of their ill-gotten gains and power and starts to reverse decades of failed globalization schemes.

http://bilbo.economicoutlook.net/blog/?p=9533

http://bilbo.economicoutlook.net/blog/?p=9544

Greece is in a recession caused by a collapse of private investment, exports and private spending. Increasing tax collection will only make those problem worse.

or the words World Bank, I'm ALWAYS going to think of Naomi Klein's book, "Shock Doctrine, The Rise of Disaster Capitalism". Yes I KNOW that the circumstances in Greece are somewhat different than the ones in South America in the 70s/80s, but guess what? THE IMF AND THE WORLD BANK'S SOLUTIONS ARE EXACTLY THE SAME! Cut social programs, increase taxes on the workers and privatize everything.

IOW, it's the same old shit. Except they're (IMF, World Bank)are NOW trying to dismantle the social democracies of EUROPE rather than the banana republics of Latin America.

In fact any time I see IMF or World Bank used in a post, I think I'll just save time and typing and respond with "Shock Doctrine".

of course they still don't have enough money to run the government.

The IMF has plenty of history behind it, and it's not a pretty picture, unless you are a bloodsucking bank.

when it is needed here at home.

I knew that eventually we would get to this point.

Eh? And we do claim that.

I didn't suggest that we actually do.

(deflationary measures) on borrowers. They call it shock therapy. The IMF "helps" like Sal the local loan-shark "helps" with payday loans.

who are interested in their antiquities. I mean, they are just laying around and all...

I can see not liking the solution, but I'd rather pay them a small amount via the IMF than lose my retirement account and then lose my job and then die starving.