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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In Russia, Stalin is back

New statues and memorabilia are appearing, as Russians overlook the terror to hark back to a perceived era of order and national safety.

It was during the Victory Day march to commemorate those who fought in the World War Two, the Great Patriotic War (as it is known in Russia) that I saw the face of Stalin. A young woman carried a crimson flag with the image of the Leader which appeared amidst the black and white photographs of grandparents remembered on the seventieth anniversary of the victory over the Nazi Germany. Just a few months later I was back in Moscow to face the fact that the fleeting image of Stalin, like a seed dropped into rich soil, has sprouted everywhere. At the busy Moscow Domodedovo airport you can now buy souvenir mugs and badges featuring a man with a moustache, coiffed hair and unsmiling eyes; men wearing Stalin T-shirts walk the streets of Moscow and just in time for the festive season 2016 calendars with the twelve photos of the ”Red Tsar” are spread across the counters of the book shops. Most shockingly, new statues of Stalin have appeared in Lipetsk, Penza and Shelanger, a village in a Russian republic Mari El. The monuments were commissioned and erected by the Russia’s Communist Party. Its leader, Gennadiy Zyuganov, promised new statues to be built in Irkutsk in Siberia and in Donetsk in Eastern Ukraine. Charles de Gaulle, the former French president was right: “Stalin didn't walk away into the past, he dissolved into the future.”

According to a January 2015 survey by an independent, non-profit organisation, founded by a Russian sociologist Yuri Levada, 52 per cent of Russians think that Stalin played a “definitely positive” or ”mostly positive” role in Russia’s history. Stalin’s positive image today is cultivated mostly through his association with the Great Patriotic War. Throughout 2015 the Russian media have been obsessively commemorating the 70th anniversary of the victory over the Nazis, with Stalin, the generalissimo, at its helm. Political psychologist Elena Shestopal, quoted by the Levada Centre, explains that the positive opinion of Stalin is a reflection of the society’s demand for order and national safety. In her view, Russians associate Stalin with the role of the father: strict, demanding and powerful.

Stalin’s resurrection is astounding not least because his role in history and his “personality cult” have been consistently condemned in Russia since 1956. Three years after Stalin’s death, the then General Secretary Khrushchev denounced it at the Communist Party conference. Stalin’s body was removed from the Red Square mausoleum; the monuments commemorating him were taken down and destroyed. During glasnost, the openness period initiated by Gorbachev, some state archives revealing the extent of Stalin’s purges and mass repressions were made public. My own grandfather, Aleksandr Bakunin, who devoted his entire life to the history of the Russia’s Communist Party and its accomplishments, set to work in his seventies to research the newly available materials and write a trilogy about the history of Soviet totalitarianism. In popular literature, Aleksandr Solzhenitsyn made stunning revelations about mass repressions and his personal experiences as a prisoner in a labour camp in his novel The Gulag Archipelago, first openly published in a Russian literary magazine in 1989. In Gorbachev’s days Nikolai Svanidze, a popular Russian TV host, historian and journalist – related to Stalin through his first wife, Ekaterina (Cato) Svanidze – declared that Stalin and Hitler were cut from the same cloth on national television. I do not believe that such a statement would be made by the Russian media today. 

An example of a “Red Tsar” calendar

With knowledge about collectivisation and famine of the 1930s, mass arrests and forced labour, the culture of terror and the totalitarian governance, it is difficult to understand the current sentiment in Russia which makes it acceptable to print Stalin’s image onto T-shirts and mugs. Russians, who approve of Stalin, credit him with turning around the backward agrarian economy with its mostly rural population into an economic and scientific powerhouse, responsible for sending the first man into space. It was allegedly Churchill who said that “Stalin inherited Russia with a wooden plough and left it in possession of atomic weapons”. These sympathisers hail rapid industrialisation and economic progress, forgetting its costs. Mayakovskiy put it well in his poem about the construction of Kuznetsk: “The lips are turning blue from the cold, but the lips recite in unison: ‘In four years this will be a garden city!’”

Stalinists are especially vocal in giving their hero credit for winning the war. By the end of 1930s, the Soviet Union had become the largest economy in Europe and in the 1940s it was the defence industry that carried the Soviet campaign against Hitler. Stalin united people and inspired them to fight the enemy both on the front line and in the factories, according to those who believe in Stalin as “the Leader”. “The European nations are being ungrateful”, they say. “Stalin saved them from the Nazis.” It is inconvenient to remember that it was Stalin who had signed a non-aggression pact with Hitler in August 1939 and had been falsely assured that Germany would not invade the Soviet Union. Stalin disregarded several reports from his own intelligence agents and defected German spies about the advancing of Hitler’s army in 1941. Millions of lives were lost as a result in the first months of the war. As for the gratitude, the Baltic and the eastern European nations are quite right to dispute the post-war reorganisation of Europe, implemented after the Yalta conference, when Stalin, Roosevelt and Churchill agreed to divide their spheres of influence.

After the war, the USSR became the second most powerful nation in the world and a force to be reckoned with in geopolitics, economics and technology. Previously illiterate peasants, Soviet citizens enrolled in universities, became engineers and doctors, went to the theatre and cinema, read and became part of the Soviet miracle. There is a great deal of nostalgia among the older generation in Russia, who mourn the ”golden decades” of the Soviet Union and wish for Russia’s international status to climb again. “We lived better with Stalin than with anyone else who came to power after him. He looked after us. Today only oligarchs live well,” said a Russian woman in her late seventies. One Russian blogger writes that mass repressions were necessary to align the Soviet consciousness to the new ideology, to replace individualism with collective responsibility. He believes that the terror was necessary to maintain order. There is also rising support among the younger generation who see parallels between Putin and Stalin, the two rulers who favour autocracy and ubiquitous state control.

Already in his seventies, my grandfather wrote two books about the genesis and the evolution of the totalitarianism in the Soviet Union. His third book was meant to be about the fall of Stalinism. Despite several heart attacks and a stroke, he continued working. He died from the fatal heart attack, his book unfinished. Perhaps, it was meant to be. Section 86 of the German Criminal Code makes it illegal to display Nazi images and to hail Hitler in Germany. In Russia, Stalin has never been similarly condemned. The Russian government ostensibly does not object to the new statues of Stalin being erected just 60 years after they had been taken down. The nation that has forgotten its own history is terrifying.