The diktat handed down by the International Monetary Fund demanding the imposition of even harsher austerity measure before the release of the €12 billion final tranche of the current Greek bailout package marks a sharp turn in the unfolding European financial crisis. Even more significant than the immediate economic and financial consequences, it poses decisive political tasks and challenges before the Greek and European working class.
According to a report in the Financial Times, when eurozone ministers met on Sunday evening they had expected to go ahead with the release of the money on condition that new austerity measures were approved by the Greek parliament. But IMF officials intervened insisting that “they needed firmer commitments before making the payment.”
The new orientation had been foreshadowed last week in remarks by IMF director of monetary and capital markets, Jose Vinals, as he introduced a new report warning of slowing world growth and heightened risks of a renewed global credit crunch. “The key message,” he said, “is we are entering a new phase of the crisis—I would call it the political phase of the crisis—and now time is of the essence to take political decisions that are needed to avoid problems down the road.”
The previous phase has been described as “kicking the can down the road” or “extend and pretend.” That is, extend ever-more credit to the banks and finance houses and pretend that the underlying problems have been tackled, until they erupt again. But “extend and pretend” has clearly exhausted itself as rating agencies continuously downgrade sovereign debt, not only of Greece, but Ireland, Spain, Portugal and most recently, Italy.
No hay comentarios:
Publicar un comentario