Courtesy of Mish.
Greece is in reverse. Greek Unemployment Rose to 23.1%, GDP contracted 1.2% last quarter, and now the US is pressuring the IMF to back away from continued bailouts.
4th “Bailout” Needed
Greece’s labor market seems immune to the broader improvements in jobs growth seen elsewhere in Europe where average unemployment has now fallen to a four-year low of 9.8 percent.
The economy, which has the highest debt burden in the bloc at 180 per cent, also suffered a sharp growth setback in the last three months of the year, contracting by 1.2 per cent.
It was the worst GDP performance since the height of its debt crisis in the summer of 2015 and reflects renewed uncertainty in its bailout talks. Average eurozone GDP rose 0.4 percent in the fourth quarter of 2016.
“Bailout” History
US Pressures IMF to Walk Away From Greece
Now, conservatives in US Congress say Europeans should solve the crisis on their own. This puts the IMF Under Pressure Over the Greek Bailout.
In what was labeled an “America First” budget revealed on Thursday, the president proposed a $650m cut in US funding over the next three years for multilateral development banks including the World Bank. He also this week nominated two conservative economists with a history of criticizing the IMF and the Bank for the two top international posts at the US Treasury.
But conservative Republicans in Congress are eager for him to go a step further. They want him to assert US power over such bodies by taking a hard line and opposing further IMF involvement in Greece, which is sliding towards another crisis this summer unless its European creditors agree to cover billions more in debt payments.
A bill introduced on Thursday by Bill Huizenga, a Michigan conservative who was first elected to Congress with Tea party backing in 2011, calls for the Trump administration to oppose any further IMF participation in a Greek bailout. Should the US fail to achieve that aim, the bill would also require the US to oppose any broader IMF quota reforms until Greece had repaid all of its debts to the IMF.
“The IMF is supposed to be a lender of last resort, not a fig leaf of first resort for eurozone members,” Mr. Huizenga said.
“The IMF isn’t a fund to rescue political parties in creditor nations, nor should it be a junior partner to outside organizations that lack the commitment to do their work,” he said. “For seven years now, the IMF has been used to shield eurozone officials from their voters, which has tarnished the fund’s reputation, prolonged Greece’s misery, and put off hard choices about Europe’s future that must be made regardless.”
Grexit Déjà Vu
