Well the verdict is in, Pope Francis beat the bank, the Vatican bank that is, and lived to talk about it. Not only did he live to talk about it, but the Vatican bank has turned a profit after the Pope restructured the bank amidst death threats. At the same time, the IMF is offering Greece a no win deal, heads the IMF wins, tails Greece loses.
But it seems the IMF’s reign of terror throughout the world may be coming to an end. The IMF, whose loans carry devastating human consequences has been playing a high stakes game of chicken with the EU and the European Central Bank over the Greek debt. This is how Forbes describes the stalemate:
Greece, The EU And The IMF Are Dancing With Death
The 2012 “private sector involvement” (PSI) restructuring wrote down up to 80% of the net present value of Greece’s private sector debts. But much of the debt had already been transferred to the public sector, not only as a result of the 2010 bailout but also through subsequent IMF and EU loans and ECB support of Greece’s banks…
So the IMF is now in a difficult position. It cannot lend more to Greece, because to do so would be to admit that the EU’s measures to eliminate systemic risk have failed. But it can’t call for debt restructuring and relaxation of budget targets without raising the possibility that it may have to take a haircut itself….
The Fund’s strategy is oddly compatible with Greece’s. Jacques Sapir, in a blogpost back in February… explained that Greece was adopting a “strength through weakness” approach…
Greece stands as close as possible to the cliff edge and dares the other players to push it over, knowing that it is not in their interests to do so. It has played this hand extraordinarily well so far, managing to avoid a catastrophic default while steadfastly refusing to cooperate with the EU or – until now – the IMF.
But the IMF has now joined Greece on the cliff edge. The challenge to the EU has changed from Greece’s “Go on, push me” to “Sort this out or we’ll let go” from the IMF….
If Greece falls over the edge, there is a serious risk that it will take the Euro down with it – and that means the end for the ECB. The IMF can credibly play this strategy. The ECB cannot.
Yes, indeedy this is a conundrum for the EU and the ECB but then that’s what they get for throwing their lot in with the IMF. Seems like Greece is sitting pretty with its strength through weakness gamble, and with their new anti-austerity government there are several options for Greece to dump the IMF and the ECB. Why not nationalize their bank? From Fox News:
ATHENS, Greece – A call by hardliners within Greece's ruling Radical Left Coalition (Syriza) party to not pay the next installment to the International Monetary Fund and to nationalize the country's banks has been narrowly defeated.
Syriza's central committee rejected the proposal by the party's Left Platform on a vote of 95-75 and one blank vote. Thirty other members of the 201-member central committee had already left for their hometowns.
Earlier Sunday, Left Platform leader Panayiotis Lafazanis had declared that "it would not be a catastrophe to exit the euro (nor) a terrorist act not to pay the next installment to the IMF."
Maybe nationalization of their banks is what Greece needs, just look at how the Vatican Bank is doing since the Pope took over. In January of 2014 The New York Times reported Pope Francis was cleaning out the rat hole at the Vatican Bank.
ROME — Pope Francis continued shaking up the Vatican on Wednesday as he named new cardinals to an oversight commission for the troubled Vatican Bank, replacing all but one of the appointees made by his predecessor, Benedict XVI, in another example of how the new pope is consolidating power….
Shortly after he announced his surprise resignation last February, Benedict approved new five-year terms for the existing five-man committee overseeing the bank…
So let’s take a look at the state of the Vatican Bank after Pope Francis cleaned out the rat hole. From Quartz:
Pope Francis has brought the Vatican Bank back to life.
Profits have skyrocketed at the overseer of the Vatican’s vast finances, as the holy bank recovers from a series of financial scandals that spurred a complete overhaul of the bank…
When Pope Francis took over leadership of the bank (which is run by 6 cardinals and other governing board members that report to the Pope), it was beset by a series of scandals that included money laundering, fraud, and criminal activity involving major Italian companies, and resulted in the resignation of the bank’s director and other top officials….
Under his leadership, the bank has restructured the financial office. It named new directors and began implementing new international accounting standards. It tightened criteria around who could use the bank, shutting down shady accounts and screening the people it served to comply with global anti-money laundering policies.
Make no mistake about it, those changes to the Vatican Bank were hard fought against a cabal of Cardinals that were about as honest and trustworthy as Jamie Dimon. Not only did Francis have to fight the Cardinals, but the threat posed by ISIS was ever looming.
I guess one would have to wonder why ISIS would be so against the Pope and his restructuring of the Vatican Bank, I can see why the IMF would be pissed, but why would ISIS unless they are an arm of the IMF. From the New York Post:
Speaking to a tabloid newspaper in Buenos Aires nearly a year after the first ISIS plot to kill him was revealed, the pontiff opened up about the frightening possibility of being murdered in cold blood…
“I have said to the Lord: take care of me. But if your will is that I should die or that they do something to me, I ask you one favor: that they don’t hurt me. Because I’m a real scaredy cat when it comes to physical pain.”
Francis — who was a nightclub bouncer before joining the seminary — was answering questions submitted collectively by residents from the town of Villa La Carcova….
The Islamic State has issued several threats over the past year against the pope, whom they refer to as the “bearer of false truth,” according to the Catholic News Agency.
Back in August, the terrorist organization claimed that Francis was “in the cross hairs of ISIS” as they planned to “raise the level of confrontation” in Europe….
Man, it seems ISIS is a catchall, an enforcer to keep in check anyone who would take on the IMF. But the Vatican Bank isn’t the only threat to the IMF, there’s also the BRICS Bank that is throwing Greece a lifeline. From WordPress:
Greece to Escape West’s Chokehold by Joining BRICS Bank – European Lawmaker / Sputnik International
Posted on May 18, 2015
Last week, Russia invited Greece to become the sixth member of the BRICS New Development Bank.
MOSCOW (Sputnik), Daria Chernyshova — Greece could climb out of the debt hole created for it by International Monetary Fund (IMF) and the World Bank if it accepts Russia’s proposal to join the BRICS New Development Bank (NDB), Sofia Sakorafa, a member of the European Parliament from the Greek ruling Syriza party, told Sputnik on Monday.
“[Greek] attempts to escape from the deadly embrace of the IMF and the World Bank have been made in the past. [The invitation to join] the bank of BRICS makes this effort the most advanced one to break the monopoly of terror.”
Five major developing economies — Brazil, Russia, India, China and South Africa — signed an agreement to establish the NDB at a summit in Fortaleza, Brazil in July 2014.
The bank is expected to become an alternative to Western-dominated financial institutions and will focus mainly on funding infrastructure projects.
Ha, ha ha. Sounds like the IMF and World Bank have met their match with Putin and the Pope. If you want to defeat evil you must venture into the depths of hell, and the IMF and World Bank are the epitome of evil.
So, Pope Francis beat the bank and lived to talk about it. Seems to me, Greece is sitting pretty; they have a new anti-austerity government whose IMF imposed weakness has given them new strength. So when the IMF comes a callin’ with their deal, “Heads the IMF wins, tails Greece loses”, Greece will have other more attractive offers to consider.
By Patricia Baeten