Wednesday, May 11, 2011

I.M.F.'s Strauss-Kahn: Without A Solution We Are All Going To Hell: Desperation in Europe

Dominique Strauss-Kahn, Managing Director of the International Monetary Fund (IMF),was tense, restless and wandered aimlessly through a luxury Zurich hotel corridors yesterday concerned with quite a few issues on his mind: how to save Greece, Europe and the euro. "If there isn't a solution, we're all going to hell," he said in a telephone conversation.

While Europe and the financial markets held their breath waiting for a solution to the Greek crisis, the IMF bosses were searching for a formula that would meet the financing needs of Greece.
Brazilian newspaper O Estado de Sao Paulo was one of the few newspapers that followed scenes of the search for a solution, which also involves the European Union (EU). Inside one of the luxury hotels in Zurich, some of the greatest economists of the world met to discuss the international financial scene in a conference room.

The tone of the debate showed the desperation of the authorities. "No use waiting a few weeks. The situation will not improve," said a senior IMF adviser to Strauss-Kahn. The IMF, usually very strict about its statements, yesterday broke a psychological barrier and seemed not to care about discussing the situation in Greece, even though the press was in the same room.

The IMF's assessment of the summit is that Greece can not be abandoned. But economists know that they must submit a "soft" project so as not to cause more controversy in countries like Germany and Finland, where governments do not want to spend more public money to save poor countries in Europe. "We have to fix this problem soon," said the counselor. "This damn thing can explode. It would be a failure of the EU," warned another.

All of them used dozens of times the word "rescheduling" to refer to the "restructuring" of the Greek debt and thus would not hurt the sensibilities of taxpayers from the rest of Europe, who do not want to give more money.

Even when the agreement was discussed. "It has to be done on a weekend, so early on a Sunday so that the Germans have time to convince the opposition during the afternoon and that the agreement is ready for Monday," suggested an aide to Strauss-Kahn .

At one point, Strauss-Kahn used the cell phone of one of his advisors and made a call, again, about Greece. Walking around as he spoke, the IMF director was emphatic. "We need a three-year plan, with or without elections. I am sorry to say this,". The governments of Portugal and Ireland have already fallen, precisely because of the austerity packages that had to adopt.

That same afternoon, Strauss-Kahn and the Minister of Finance of France, Christine Lagarde, met for over an hour to discuss what to do with Greece, leaving the event to which were invited. Leaving the meeting, Lagarde was emphatic about the commitment of Europe with Greece. "We're bailing them for a year and we will continue."

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