The International Monetary Fund’s (IMF) hawkish attitude towards Greece has many people perplexed, but there is nothing surprising about it: the Fund is notoriously known for its insistence on the implementation of radical structural adjustment programmes by countries that have sought solace in its arms because of financial emergencies.
Nonetheless, the IMF’s stance on Greece’s third bailout agreement seems to have created confusion even among many analysts who should know better when they wonder out loud about the Fund’s actual intentions, as in the case of a recent Huffington Post report titled “How the IMF Could Blow Up Greece’s Debt Agreement.”
For starters, the IMF had misgivings about the third bailout and refused to say whether it will join in its supervision along with the European Union (EU). Still, IMF officials have been making demands all along as to what they expect the Greek government to do before they make up their mind on whether or not the Fund will participate in Greece’s new bailout agreement. This is typical IMF stance in the Fund’s strategic aim to advance its policy agenda.
The IMF appears to be in total disagreement over the budget targets agreeed by the Greek government and its EU creditors as part of the new bailout plan. A key element of the Fund’s disagreement involves plans to achieve pension savings through an increase in employer contributions. Out simply, the IMF wants workers themselves to bear the burden, not the business community.
The IMF’ economic philosophy has been the same for the last 40 years and it is based on a set of highly dogmatic pro-market principles which often enough run counter to empirical evidence. The idea that economic development can be attained through the liberalization of the economy, privatization, and the diminisging role of the public sector is a great myth whose perpetuation has caused inestimable damage to many of the world’s economies.
This claim has been extensively backed by empirical research. One major research indictment of IMF’s structural adjustment programmes is to be found in a three-year, multi-country study by the Structural Adjustment Participatory Review International Network (SAPRIN) published in 2001.
Some of the SAPRIN’s findings in regard to the impact of the IMF’s structural adjustment programmes in many countries around the world include “expanding poverty, inequality, and insecurity….” which “are in turn increasing tensions among different social strata, fueling extremist movements and deligitimazing democratic political systems.”
SAPRIN’s findings of the impact of IMF’s structural adjustment programms in third world countries fit easily into Greece’s case. Reducing average citizens into paupers so the rich can get richer is a major objective of IMF’s structural adjustment programmes.
No doubt, this is what the IMF aims to accomplish in Greece with its insistence that average Greeks bear the major burden for the country’s financial crisis. Whether it will succeed or not does not depend on the current government, but on the reaction of the Greek people themselves.
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