This is a must-read article by Peter Spiegel published in the FT. Check it out!
via Greece disqualified from new IMF bailout, board told – FT.com.
It looks like hard-liners in the IMF and Germany are creating more roadblocks, making a new bailout less likely.
Greece signed up to the humiliating deal and is facing up to the political implications. Meanwhile, it looks like the creditors are not ready to stand by their proposal. I think that Christine Lagarde, the IMF Managing Director is the weakest link. This former lawyer and French politician is not an economist and she has allowed the IMF to become Germany’s poodle.
Whether the IMF is Germany’s poodle or not is an issue as Dr Alf says.
Christine Lagarde’s continued role, as IMF managing director, is another connected issue but people in those sorts of roles do not, as a rule, go quickly if they go at all, so we are left with the continued problem of Greece which was supposedly settled week’s ago.
If the bailout is withdrawn, having been forced onto Greece, then Germany loses credibility and Greece financially implodes, then reverts to the Drachma.
If the bailout is granted, or granted in modified form, it does not reflect well on Germany nor the EU.
We are left with a situation in which what has been agreed needs to be implemented in a form of “Last chance saloon” economics.
Once implemented, there can be no turning back, no vacillation and no backsliding by Greece, Germans or anyone else–This has to be the cocaine addict going into rehab and coming out clean and completely changed but with the doctors and psychologists all singing from the same hyme-sheet.