IMF Secret Plans to Impose Further Austerity on Greece

On April 2, 2016, WikiLeaks released transcripts of a secret teleconference among IMF officials that occurred on March 19. In it, leading IMF directors expressed concern that discussions between Greece and the IMF’s Troika partner, the European Commission, on terms of implementing last August’s deal were going too slowly.

   The Eurozone and Greek economies have been deteriorating since last August. Still more austerity would thus be needed, according to the discussions among the IMF participants in the teleconference. And to get Greece to agree, perhaps a new ‘crisis event’ would have to be provoked.

   The original August 2015 deal called for Greece to introduce austerity measures that would result in a 3.5 percent annual GDP budget surplus obtained from spending cuts, tax hikes, and public works’ sales needed to make the debt repayments to the Troika.

   But the IMF’s latest forecast for 2016 is that Greece in 2016 would have a -1.5 percent GDP budget deficit, not a 3.5 percent budget surplus.  And 2015, for which numbers are not yet available, was probably even worse. Getting from -1.5 percent or worse to 3.5 percent was thus virtually impossible, according to the IMF discussants on March 19, and therefore additional austerity measures were necessary.

   According to the IMF, the additional austerity would have to occur in the form of ‘broadening the tax base’ - a phrase typically associated with making households with lower incomes pay more taxes instead of just raising tax rates on the top income households. The IMF thus rejected taxing the rich further, and instead taxing middle and working classes more. In addition, still more pension cuts would also prove necessary, as well as other measures.

   The IMF secret teleconference further revealed that the IMF was increasingly concerned that the European Commission, in the midst of discussions with Greece on the details of the implementation of the August deal with Greece, might agree prematurely to grant some kind of ‘debt relief’ to Greece. The IMF was strongly opposed to ‘up front’ debt relief. All talk of debt relief should be postponed for at least another two years, according to the IMF’s secret discussions.

   The private teleconference also revealed the IMF was growing increasingly concerned that Greece’s major debt payment to the Troika due this coming July 2016 might not be paid. The default on the payment would come within weeks of a possible United Kingdom exit (Brexit) from the European Union, scheduled for a vote in the UK on June 23, 2016. If the UK exited, and Greece could not pay, it might raise renewed interest - the IMF feared - in a Greek exit (Grexit) as well as a UK ‘Brexit.’ The IMF’s March 19 teleconference therefore raised the idea that further austerity should be considered and proposed on Greece and quickly, before the June 23 UK referendum in that country.

Πηγή: telesurtv.net