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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The case against TTIP

Let’s not weep for a US trade deal.

It was the sentence, we were assured, that torpedoed the referendum debate. Asked about Britain’s chances of securing a unilateral trade deal with the United States after leaving the EU, Barack Obama declared: “The UK is going to be in the back of the queue.”

The comment was catnip to the Remain side: the Brexiters have long conjured up the image of a newly divorced Britain taking her rightful place in the “Anglosphere” without the rest of the EU dragging us down. Instead, the US president was telling us, we would be left out in the cold.

But here’s a question for you: what’s so great about a US trade deal, anyway? For the past three years, the acronym “TTIP” has been floating across my vision. I’ve always had the sense it was a Bad Thing, without ever really understanding why. So what is the Transatlantic Trade and Investment Partnership, and should we be against it?

My first port of call is my nerdiest friend. “The first rule of TTIP is, anyone who thinks TTIP matters is a douche,” he tells me briskly. It’s safe to say that’s very much not the opinion of Mark Dearn, a senior trade campaigner at War on Want, who gives me a quick run-through of why the agreement has attracted such widespread protests, including a march by 150,000 people in Berlin last October.

“It’s the biggest trade deal in the history of the world,” he says. “It’s negotiated in secret: all the EU currently publishes is its offers. They don’t publish the US offers and they don’t publish the consolidated text – the legally binding documents.”

Such secrecy – which is, to be fair, not unusual in delicate negotiations – does make TTIP look sinister. Very few people are allowed to see the full set of documents, and they must do so in special reading rooms, after signing a non-disclosure agreement and handing over their electronic devices.

There are two areas that particularly alarm campaigners: food and health care. Last year, Alan Beattie of the FT summarised the objections as fears that TTIP will “gut public health-care systems and force American Frankenfoods down European gullets”.

War on Want’s Mark Dearn echoes this, and suggests that removing barriers to trade – the stated aim of TTIP – will lead to Europe lowering its food hygiene and additive standards to match those of the US.

“Eighty per cent of US beef is full of growth hormones or antibiotics that are banned in the EU,” Dearn says. “Forty per cent of US grain uses banned pesticides.” The US also permits “acid washing” of meat to remove contamination. “The EU views that as a form of moral hazard; it makes you think it doesn’t matter what you do [in the factory] up to that point, because you’re killing microbes at the end.”

Many campaigners also want the NHS exempted from TTIP. They worry its provisions on “indirect expropriation” will encourage private companies to sue governments for restricting their ability to do business. That could penalise any state that nationalised a failing industry or cancelled a planned project. Or, perhaps, ran a public health service.

The National Health Action Party has warned that TTIP could deliver a “fatal blow to the NHS”. I ask the party’s campaign manager, Deborah Harrington, what changes patients will experience if TTIP is implemented. “Nothing,” she answers, to my surprise. “But people don’t notice what’s different now, because it’s all behind the NHS logo. It will take people time to realise how the private sector has reshaped the NHS. There’s no big bang.”

Finally, I call the Adam Smith Institute, the country’s best-known libertarian think tank, reasoning that if they’re for it, then I’m probably against it. The ASI’s executive director, Sam Bowman, confirms that he backs TTIP in principle, “although it’s hard trying to predict what’s in an agreement we haven’t seen”. He tells me that the picture of the US as a food hygiene Wild West is not completely accurate: American producers can’t label beef from cows fed antibiotics as organic, for example, but Europeans can. He also doesn’t find the acid-washing of meat as alarming as it sounds. “It sounds gross – basically you’re dipping a chicken in swimming- pool water – but it’s done to comply with antimicrobial laws. And in the US, people find the idea of unpasteurised cheese horrifying.”

Bowman believes that TTIP, like the European single market, will increase GDP by increasing trade. He points out that the UK parliament will get a veto on the final text, and worries that campaigners “are taking the lack of transparency as an excuse to promote a conspiracy theory – that EU governments are colluding to deregulate”. He laughs. “As a libertarian, I wish that were true.”

Helen Lewis is deputy editor of the New Statesman. She has presented BBC Radio 4’s Week in Westminster and is a regular panellist on BBC1’s Sunday Politics.

This article first appeared in the 28 April 2016 issue of the New Statesman, The new fascism