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Saturday, May 26, 2012 12:42 PM

Harsh Language from Lagarde: "IMF Has No Intention of Softening Terms"; From Head of Deutsche Bank: "Greece is a Failed Corrupt State"; Purposely Inflammatory Statements to Force Greece Exit

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Strong messages from the head or the IMF, the head of Deutsche Bank, and the president of the Bundesbank are highly likely to drive Greek voters away from New Democracy and Pasok in the June 17 elections.

The Guardian writes It's payback time: don't expect sympathy – Lagarde to Greeks.

The International Monetary Fund has ratcheted up the pressure on crisis-hit Greece after its managing director, Christine Lagarde, said she has more sympathy for children deprived of decent schooling in sub-Saharan Africa than for many of those facing poverty in Athens.

In an uncompromising interview with the Guardian, Lagarde insists it is payback time for Greece and makes it clear that the IMF has no intention of softening the terms of the country's austerity package.

Asked whether she is able to block out of her mind the mothers unable to get access to midwives or patients unable to obtain life-saving drugs, Lagarde replies: "I think more of the little kids from a school in a little village in Niger who get teaching two hours a day, sharing one chair for three of them, and who are very keen to get an education. I have them in my mind all the time. Because I think they need even more help than the people in Athens."

"I think they should also help themselves collectively." Asked how, she replies: "By all paying their tax."

Asked if she is essentially saying to the Greeks and others in Europe that they have had a nice time and it is now payback time, she responds: "That's right."

Jens Weidmann, president of the Bundesbank, poured cold water on the idea – which is strongly backed by the French president, François Hollande – and also said financial aid to Greece should be cut off if it failed to keep to the bailout deal.

Jürgen Fitschen, joint head of Germany's biggest bank, Deutsche, described Greece as "a failed state … a corrupt state".
Purposely Inflammatory Statements to Benefit Syriza

Those statements are not only inflammatory, but purposely so. Lagarde has to know that her message stating more sympathy to Africa than patients refused life-saving drugs in Greece is bound to incite Greeks.

Recall that Antonis Samaras (the head of New Democracy) and Evangelos Venizelos (the head of Pasok), have promised voters they will renegotiate the terms.

Greek voters just had that promise yanked away in no uncertain terms. IMF and Deutsche Bank statements also make German chancellor Angela Merkel look like a cream-puff with her offer of potential stimulus efforts.

In contrast to the lies of Samaras and Venizelos, Syriza leader Alexis Tsipras says the bailout is null and void, while stating Greece will remain in the euro.

It is had to say with certainty whether his promise to remain in the eurozone is a purposeful lie as opposed to pure fantasy, but given there is no provision to kick any country out of the eurozone, he just might believe it.

Lies and Bluffs

For further discussion please consider

What if Tsipras is Not Bluffing? Who Holds the Upper hand? What is Troika's Biggest Fear? Can Greece Possibly Stay in the Eurozone After Default?

Merkel's 6-Point Plan to Save Europe; Merkel Backed Into Tight Corner: Social Democrats Threaten to Not Ratify Merkozy Treaty Without Growth Measures; Merkel Coalition at Risk

IMF Purposeful Attempt to Incite Greek Exit

The IMF has had enough. It does not want to deal with a coalition of Samaras and Venizelos given falling revenues in Greece and no hint of any true structural reforms. Rather, Lagarde wants to drive Greek voters to Syriza so that Greece can default and the Troika can cut off all funding in "clear conscience"

All funding should be cut now (in fact three years ago), but the IMF hopes to absolve itself of blame.

Mike "Mish" Shedlock
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