Christine Lagarde's "tough love" is an insult to Greece

By urging Greeks to pay up without whingeing the IMF chief has revealed her deep historical and cult.

You are crossing the road, a little absent-minded. About two-thirds of the way, you become aware of oncoming traffic. And right then, in that moment of panic, instead of speeding up to the safety of the near pavement, you freeze. Or, even worse, you try to turn and go back to where you came.

It is an illogical reaction to a simple, urgent problem. We’ve all done it. But when the head of the International Monetary Fund behaves in such a way, faced with the oncoming juggernaut of economic crisis, it is a source of deep concern.

In an interview for the Guardian, Christine Lagarde did exactly that. She chose to tell Greece it was payback time. “That’s right”, she said calmly, “Yeah.” She chose to talk about starving babies in sub-Saharan Africa to strengthen her call to Greece to stop whingeing and pay up. She chose to pinpoint tax evasion by a fraction of the population of a country which accounts for less than 0.5% of the world’s GDP as the sole source of the world’s economic woes. She chose to bury her head in the sand.

But, while her argument has been loudly lauded as “tough love” in many a luxurious Northern European dinner-party, over a glass of cheeky Beaujolais Nouveau, the most rudimentary scrutiny reveals it to be strategically, economically and intellectually flawed.

Her stance shows a complete misunderstanding of the psychology of a nation which has suffered nearly five years of recession and the severest of austerity cuts; a nation which is increasingly and vocally rejecting foreign interference and which is being pushed to political extremes in the upcoming election.

What was the idea, strategically, behind such a statement? If anyone seriously believed that having a representative of the IMF – the Grand Protector of the financial status quo – tell Greece to put up and shut up, would have the effect of encouraging people to vote for centrist pro-austerity parties, then they understand the mood there even less than I thought.

There are very few ways one could make such a move even more cack-handed. One could choose, as the vessel of such sentiments, an ex-Finance Minister of a Eurozone country; perhaps someone who left France with its highest deficit in 60 years. One could choose someone currently under investigation for not just one but two cases of fraud in shady financial deals. One could even accompany this interview with a pictorial which showed her dispensing thrift advice, while displaying a deep tropical tan, heavy jewellery and expensively tailored clothes.

And from such a throne of non-credibility, came the attractively packaged but intellectually hollow arguments.

First, the insidious idea that the misery engulfing the people of any nation is to be ignored, on the basis that there is even worse misery elsewhere. That in some way helping Greece – a member of the European Union for thirty years – is a direct alternative to helping “little kids from a school in a little village in Niger”. There is no such proposed programme to help little kids in Niger, you understand. This is a fictional programme, part of the IMF’s varied portfolio of fictional charitable work, that could, possibly, maybe happen, if only Greeks stopped being so selfish.

The hollow nonsense continued to flow freely. Faced with the question of women without access to a midwife when they give birth, patients dying without access to drugs, the elderly dying alone for lack of care and children starving, Lagarde’s response is simply to say that it is very easy for them to help themselves. How? "By all paying their tax. Yeah."

That’s right. Because, plainly, it is the same mothers without access to midwives, the elderly without care, the sick who cannot afford the newly introduced €5 hospital admission fee, the children without food, who have hoards of taxable income and are busily trying to send it to banks in Switzerland, while starving. Greece as one homogenous, tax-dodging mass responsible for its own downfall.

Which all enforces the grand illusion that all this is nothing to do with a global financial crisis, brought about by the very interests that the IMF represents. Instead, it was a Greek time-bomb waiting to explode. This, however, creates some difficulty in explaining the IMF’s assessment of Greece in May 2008. It boasted headlines like; “The Greek economy has been buoyant for several years and growth is expected to remain robust for some time”; “The Greek banking sector appears to be sound and has thus far remained largely unaffected by the financial market turmoil”; and “in view of Greece’s membership in the EMU, the availability of financing for the external deficit is not a concern”.

Presumably, what is implicit in Lagarde’s comments is: We got it wrong then, but you should take our advice now. We’re definitely, definitely right this time. The IMF is, after all, the forensic scientist of the world’s financial woes. “It's not either austerity or growth, that's just a false debate”, Lagarde explains. “Nobody could argue against growth. And no one could argue against having to repay your debts. The question and the difficulty is how do you reconcile the two, and in which order do you take them? I would argue that you do it on a country by country case.”

I invite Christine Lagarde to name one example, one country, one case where the IMF decided that repaying a debt came second to growth.

It certainly was not Malawi – ordered by the IMF to sell its grain reserves in 2001 to private companies in order to repay a debt with 56% interest (which it had been advised to take by the IMF); a move which directly caused hundreds of people to die the next year.

It certainly was not Argentina which, having been the busty centrefold of IMF policies throughout the 1990′s sticking religiously to all IMF advice – privatising everything but their anthem, liberalising industries, lowering corporation taxes while tightening public spending, suffered one of the most catastrophic economic collapses in 2001. The IMF demanded it got paid first and actively lobbied against discounts to creditors.

As a matter of fact, there appears to be not a single example of the IMF’s Structural Adjustment policies applied to a crisis situation where they haven’t brought more misery and stagnation. Its obsession with austerity has recently been described as “dangerous” for European recovery, by the OECD.

Nobel-winning Joseph Stiglitz, put it at its bluntest: “When the IMF arrives in a country, they are interested in only one thing. How do we make sure the banks and financial institutions are paid?... It is the IMF that keeps the speculators in business. They’re not interested in development, or what helps a country to get out of poverty.”

So, should we simply discount Christine Lagarde’s noisy drivel? Should we ignore the IMF’s advice altogether? That would be a mistake. This is, for instance, what they said about the UK economy: “The financial sector is strong and well supervised with a principle-based approach. The fiscal framework is good, and the mission focused on how to build fiscal cushions needed to respond to adverse shocks.”

They said this in 2007, a year before the entire house of cards collapsed on our heads – a collapse for which our children’s children will be paying, for many decades to come. The conclusion, therefore, must be that one should never ignore the IMF’s advice. One should study carefully what is being advocated, then do precisely the opposite.

Many Greek voters certainly plan to. That’s right. Yeah.

Greek-born, Alex Andreou has a background in law and economics. He runs the Sturdy Beggars Theatre Company and blogs here You can find him on twitter @sturdyalex

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Turkey's turmoil should worry David Cameron

Splits in the Turkish government could play into the Brexiteers' hands.

While Britain focused on Sadiq v Zac and Cameron v Corbyn, in Turkey an even more dramatic contest was coming to a head. For weeks there has been growing speculation about a split between Ahmet Davutoğlu, the wonkish prime minster, and President Recep Tayyip Erdoğan, the macho, mercurial kingpin of Turkish politics. The two men have differed over a growing crackdown on freedom of expression, the conflict with Kurdish militants in Turkey’s south east and Erdoğan’s ambitions to strengthen his own power. Yesterday, a nervous-sounding Davutoğlu confirmed on live television that he would leave his post.

To outside observers, this might seem like a faraway power struggle between two men with unpronounceable names. But it matters for Britain and the impending EU referendum in two crucial ways.

1. It throws the EU-Turkey refugee deal into doubt

The controversial €6bn agreement to stem the flows to Europe was born of the strong relationship between Davutoğlu and German Chancellor Angela Merkel. Not only does President Erdoğan have a far more ambivalent attitude towards the EU. He has also made Merkel’s life difficult by demanding the prosecution of a German comedian who penned a crude poem about him.

Though much criticised, the EU-Turkey deal has dramatically reduced the numbers being smuggled by sea to Greece. If it collapses, Europe could be heading for a repeat of last year’s crisis, when more than 800,000 people arrived on Greek shores. In Britain, such scenes will only fuel concern about migration - a key driver of anti-EU sentiment.

2. It plays into the narrative of the Brexit camp

Brexiteers have already sought to use Erdoğan’s growing illiberalism - and Turkey’s aspirations to join the EU - to win people over to their side. Turkey’s “palace coup” (as the opposition newspaper Cumhuriyet called it) cements the image of Erdoğan as an all-powerful leader who will not tolerate dissent. The accusations against Turkey are often ill-informed and tinged with Islamophobia. But they are clearly seen as effective by both sides in the referendum campaign. Only this week, David Cameron was forced to distance himself from his previous enthusiasm for Turkish accession, insisting that the prospect would not be on the cards “for decades.”

For now, Erdoğan’s intentions towards the EU deal are unclear. Perhaps he would like to take credit for visa-free travel for Turkish citizens to the Schengen Zone (but not the UK) - an attractive perk promised in return for Turkey’s cooperation. But it is just as easy to imagine him watching it collapse before railing against the perfidious west.

Either way, there will be nerves in Brussels, Berlin and London. Diplomats see the president as a much more difficult partner than Davutoğlu. “Erdoğan has to be handled very carefully,” said one official. “If Jean-Claude Juncker says something too blunt, who knows what will happen?”

Turkey still has several hurdles to clear before visa-free travel is approved. Ankara has made clear that it will not hold up its end of the bargain if the promise is not fulfilled. With the deadline for implementation set for the last day in June, the deal could begin imploding towards the end of next month. That, David Cameron will surely note with a gulp, would be just in time for the EU referendum.