29 July 2016   Leave a comment

The Independent Evaluation Office of the International Monetary Fund (IMF) has issued a blistering report on how the IMF has handled the various crises associated with sovereign debt in Europe–in Greece, Ireland, Portugal, and Cyprus.  The evaluation is breathtaking in its seriousness: that the IMF acted on the basis of documents that were not made available to the Independent Evaluation Office.  In an article for the Telegraph, Ambrose Evans-Pritchard, points out that

“In Greece, the IMF violated its own cardinal rule by signing off on a bailout in 2010 even though it could offer no assurance that the package would bring the country’s debts under control or clear the way for recovery, and many suspected from the start that it was doomed.

“The organisation got around this by slipping through a radical change in IMF rescue policy, allowing an exemption (since abolished) if there was a risk of systemic contagion. ‘The board was not consulted or informed,’ it said. The directors discovered the bombshell ‘tucked into the text’ of the Greek package, but by then it was a fait accompli.”

The report validates criticisms that have been made by many outsiders over the years.  Given the power of the IMF, it is unfortunate that action on the failures will never make the front pages of most media.  In the meantime, three top executives associated with the failed Anglo-Irish Bank were sentenced to jail for conducting a fraud in 2008 that was part of the near-collapse of the global financial sector.  Note that no American banker has yet to be jailed for similar activities in the banking sector.

Israel has announced plans to build new Jewish settlements in East Jerusalem, a move that drew swift condemnation from international observers.  The Palestinian Authority considers East Jerusalem to be the capital of the future Palestinian state, but the build-up of Jewish settlements makes that outcome increasingly unlikely.  After the collapse of American-led efforts to restart Israeli-Palestinian peace negotiations last year, the diplomatic effort toward that end shifted to what is known as the “Quartet“–the US, the European Union, Russia, and the United Nations–to try to broker a peace.  In its report last February, the Quartet assessed the settlement issue in this way:

“The continuing policy of settlement construction and expansion in the West Bank and East Jerusalem, designation of land for exclusive Israeli use, and denial of Palestinian development, including the recent high rate of demolitions, is steadily eroding the viability of the two-state solution. This raises legitimate questions about Israel’s long-term intentions, which are compounded by the statements of some Israeli ministers that there should never be a Palestinian state. In fact, the transfer of greater powers and responsibilities to Palestinian civil authority in Area C contemplated by commitments in prior agreements has effectively been stopped, and in some ways reversed, and should be resumed to advance the two-state solution and prevent a one-state reality from taking hold.”

Unfortunately, the international pressure has yet to yield a change in Israeli policy.

Jabhat al-Nusra, one of the rebel groups fighting against Syrian President Assad has renounced its allegiance to al Qaeda and announced that it will confine its militant activities to Syria.  The change is an attempt to remove the group from “terrorist” lists so that it will no longer be a legitimate target for the international forces fighting in Syria since it will no longer be aligned with international terrorist groups.  The change is unlikely to persuade Russia to refrain from attacks since the distinction between “domestic” and “international” terrorism is not pertinent to Russia’s clear objective of supporting President Assad.


Posted July 30, 2016 by vferraro1971 in World Politics

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