Paulo Nogueira Batista, Executive Director of the IMF for Brazil, and representative of ten other countries on the IMF board, has gone on record in a video interview describing what went on in the IMF at the time of the Greece bail out. He is clear and explicit about all the issues involved, the video is well worth watching in full. He is clear that the IMF changed its rules almost overnight to enable a massive loan to Greece which the staff of the IMF were saying the country would probably not be able to repay. He says this was done so that numerous European banks could be protected from losses. Batista makes it clear that this extraordinary decision, to change the rules and make a giant unsustainable loan, was not done in a transparent way and was done at the behest of the Europeans on the board. He is clear that Greece would have been better served with an upfront debt restructuring.
Batista goes on to say that in the last 30-40 years there has been enormous increase in the economic, financial, political power of the financial sector which have created enormous distortions, and that the financial sector has come to control and influence the political decisions in a manner that is alarming.
“What you seeing in Europe today, in the Euro area, is that these countries have paid an enormous price to adjust to these hegemonic interests.”
Later Batista says:
“The worse that can happen to a country is to fall into the hands on an international bureaucracy. The extent of intervention in Greece is amazing. The Troika has designed a program for Greece that is such a detailed program that it’s a complete government program, administered from the outside. Now, can that work?
In this article Batista and Hector R. Torres, a former Executive Director of the IMF, set outs how to reform the IMF
