Monday, March 16, 2015

John Helmer — IMF Violates Charter

The International Monetary Fund (IMF) has agreed on a scheme of war financing for Ukraine. For the first time, according to Fund sources, the IMF is not only violating its loan repayment conditions, but also the purposes and safeguards of the IMF’s original charter. 
IMF lending is barred for a member state in civil war or at war with another member state, or for military purposes, according to Article I of the Fund’s 1944-45 Articles of Agreement. This provides “confidence to members by making the general resources of the Fund temporarily available to them under adequate safeguards, thus providing them with opportunity to correct maladjustments in their balance of payments without resorting to measures destructive of national or international prosperity.” 
To deter Russian and other country directors from voting last week against the IMF’s loan, and releasing their reasons in public, the IMF board has offered Russia the possibility of, though not the commitment to repayment for Gazprom’s gas deliveries, and the $3 billion Russian state bond which falls due in December.
 
On March 11 the IMF board agreed to approve an Extended Loan Facility (EFF) for Ukraine for a total of 13.4 billion Special Drawing Rights (SDR), currently equivalent to $17.5 billion. Here are the IMF papers spelling out the details.
A Russian central banker who has served at the IMF comments: “the Fund should not place military spending below the line. But if you try to nail the Fund down on that, you would be wasting your time. The Fund has internationally-renowned expertise in doublespeak and hypocrisy. What the Fund is doing around Ukraine was at first laughable; now has become outrageous. No matter what, the Fund will keep financing the civil war in Donbass because the Americans want the fighting to continue and spread. Period.”....
Although the Obama Administration claims it will not deliver lethal military equipment, it has been offering loans, repayment guarantees, and cash support for Ukrainian military agencies to buy it through third countries. Russian analysts call this a takeover by the Pentagon of the Ukrainian defence budget. Details of the line items totalling UAH 85 billion (about $4 billion) approved this month by the Verkhovna Rada can be read here....
Seems that charters, like contracts, are to be broken when they interfere with TPTB. Hypocrisy?

Dances with Bears
IMF MAKES UKRAINE WAR-FIGHTING LOAN — ALLOWS THE US TO FUND MILITARY OPERATIONS AGAINST RUSSIA, MAY REPAY RUSSIAN BOND AND GAZPROM BILL – FRANKLIN TEMPLETON BOND DEAL IN FREEFALL
John Helmer

See also
Ukrainian President Petro Poroshenko has admitted that a new $17.5 billion loan from the International Monetary Fund and its associated austerity measures will not improve the lives of ordinary Ukrainians—but will help pay foreign creditors and fund the ongoing civil war in the country’s embattled eastern region. 
“Life won’t improve shortly,” Poroshenko said in televised comments on March 10, one day before the IMF approved the loan. “If someone understands the reforms as improvement of people’s living, this is a mistake.” 
One reason for the cooled expectations is what he called the “tough wartime conditions.” He also announced a fourfold increase in defense spending, a boost that according to Business New Europe, “will inevitably impact already limited means for social welfare and pensions.
Truthdig
Ukrainian President: Enormous IMF Loan Won’t Help Ordinary Ukrainians
Posted by Alexander Reed Kelly.

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