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Really good piece, and all great counterpoints to the IMF's arguments.

However, your diary opens up a new dialogue about whether the Greek government should carry out the EU/IMF austerity plan which is actually distinct from the one about whether or not it really has to or can do it.  I think clearly it does not have to -- there are other options that could be less painful to various of the current or past beneficiaries of Greek fiscal policy.  But from the point of view of non-Greeks, particularly European non-Greeks but also the rest of the world as well, I think the IMF is doing a very good job of trying to compel Greece to do things that make the world a better place for everyone else, and that is, in fact, the IMF's principal mission in the world, neo-liberal or not.

The issue at stake here is that the Greek government, as a member of the EU, been compelled by its citizens, quite reasonably, to provide social benefits closer to those enjoyed by many larger and wealthier members of the EU polity of which they are members. But the structure of the EU, particularly the single currency, makes it difficult for the Greek government to deliver on those commitments with its own resources, thus Greece has essentially tried to compel either its creditors, or the rest of the EU, or both, to provide it with resources to do that. This situation is inherently contradictory -- Greek commitment to the EU project and what is essentially Greek policy to take from (largely EU) foreigners to give to Greek citizens -- so it naturally leads to political conflict and crisis.

The IMF's purpose is not primarily to help Greek citizens or the Greek government, contrary to what most discourse, including IMF discourse, on the matter seems to suggest.  Rather, it is to help provide for global financial and economic stability. Given the conflict over who gets what, when, and how that is going on today  in the Greek/EU/bankers drama, it seems like the IMF has a pretty good moral case at least (provided that everyone agrees, as Greece does so far, that the EU and the Euro are institutions worth protecting) for trying to compel Greece to implement policies that don't involve transfers of resources from the rest of us to Greeks.  

by santiago on Tue May 25th, 2010 at 05:15:21 PM EST

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