A new report by the International Monetary Fund’s (IMF) Independent Evaluation Office (IEO) offers a scathing review of an organization dominated by political bias and classic human errors of wilful blindness, cognitive dissonance, complacency and “superficial and mechanistic” analysis , where top staff ignored signs of looming crisis, misled their own board and became euphoric cheerleaders for the euro project led by Germany and the finance sector at the expense of countries like Greece . Unrealistic terms, missing documents, others prepared outside established channels. This, dear readers, is a veritable shit show.
The Telegraph’s Ambrose Pritchard-Evans offers an excellent overview: IMF admits disastrous love affair with the Euro and apologizes for immolation of Greece:
The report said the whole approach to the eurozone was characterised by “groupthink” and intellectual capture. They had no fall-back plans on how to tackle a systemic crisis in the eurozone – or how to deal with the politics of a multinational currency union – because they had ruled out any possibility that it could happen.
“Before the launch of the euro, the IMF’s public statements tended to emphasise the advantages of the common currency,” it said. Some staff members warned that the design of the euro was fundamentally flawed but they were overruled.
“After a heated internal debate, the view supportive of what was perceived to be Europe’s political project ultimately prevailed,” it said.
This pro-EMU bias continued to corrupt their thinking for years. “The IMF remained upbeat about the soundness of the European banking system and the quality of banking supervision in euro-area countries until after the start of the global financial crisis in mid-2007. This lapse was largely due to the IMF’s readiness to take the reassurances of national and euro area authorities at face value,” it said.
Meanwhile former Greek Finance Minister Yanis Varoufakis, who stepped down complaining that the status quo was not interested in realistic negotiations or restructuring, is today rightly calling for the resignation of IMF European Department head Poul Thomsen, who was in charge of terms demanded of Greece and Portugal.
Big thanks to JAZZ FM 91.1 for a fantastic safari through Niagara wine country yesterday with Jaymz Bee and so many incredible musicians. ‘Social music’ indeed. Cory and I had so much fun.
