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Generational Dynamics Web Log for 14-Nov-2012
14-Nov-12 World View -- Raucous EU-IMF confrontation lightens mood around Greece's bailout disaster

Web Log - November, 2012

14-Nov-12 World View -- Raucous EU-IMF confrontation lightens mood around Greece's bailout disaster

The Dalai Lama, in Japan, criticizes China over Tibet

This morning's key headlines from

Raucous EU-IMF confrontation lightens mood around Greece's bailout disaster

Jean-Claude Juncker and Christine Lagarde on Tuesday
Jean-Claude Juncker and Christine Lagarde on Tuesday

The disagreements between the International Monetary Fund (IMF) and eurozone finance ministers broke out into raucous confrontation on Monday. Putting together several sources, this is what happened:

Jean-Claude Jüncker, president of the Eurogroup of finance ministers, and also Luxembourg’s prime minister, said that the European finance ministers wanted to grant Greece the two-year extension on its new austerity commitments, when he said that the target date for Greece to achieve a "sustainable" debt level would be 2022.

When Jüncker made that declaration, he was sitting right next to Christine Lagarde, the head of the IMF.

She said, "Did you say 2022?"

He said, "Yes."

She said, "No we don't have agreement on that."

He said, "I'm not joking."

Then Jüncker repeated his declaration.

A visibly angered Ms Lagarde ostentatiously shook her head and rolled her eyes. She said:

"We clearly have different views. What matters at the end of the day is the sustainability of the Greek debt so that that country can get back on its feet and re-access the private market in due course.

What we regard as critical insofar as the IMF is concerned is that the Greek debt is sustainable. In our view the appropriate timetable is 120 per cent [of GDP] by 2020 [as opposed to 2022]."

And let's recall that European politicians have lied over and over again, and Eurogroup chairman Jean-Claude Jüncker was quoted as saying, "When it becomes serious, you have to lie," as we reported in May, 2011.

Well, this situation is certainly serious, so I guess Jüncker must be lying. He said that all the Eurogroup finance ministers agreed to 2022, but I doubt very much that Germany, Finland, the Netherlands or Austria did. So I'm pretty sure that his claim was a lie.

Jean-Claude Jüncker in 2005, furious at the British for not wanting to spend more money. (BBC)
Jean-Claude Jüncker in 2005, furious at the British for not wanting to spend more money. (BBC)

Ms. Lagarde took a far more principled position, but the IMF is a global organization, not a European organization, and its sponsors in America, in China, and in Brazil are going to wonder why they should have to be bailing out Greece, when that's Europe's responsibility. In fact, the bailout money doesn't even really go to Greece; it goes to European banks that purchased massive amount of toxic Greek debt.

So, apparently Greece is going to get its two-year extension, but that extension is going to require an additional 32.6 billion euros on top of the 148 billion euros Greece has already been promised.

There was no agreement on who was going to pay that additional 32.6 billion euros. There will be another Eurogroup meeting on November 20, to iron out that tiny little detail.

However, Greece did get some good news on Monday: It was able to sell 5 billion euros in short-term bonds, enough to prevent it from going bankrupt on Friday. Telegraph (London)

France becomes first European country to recognize Syria's opposition government

France broke with other European countries by becoming the first to recognize Syria's Syrian National Coalition (SNC) as the government of Syria. France's president François Hollande said on Tuesday:

"I announce today that France recognizes the Syrian National Council (SNC) as the sole legitimate representative of the Syrian people and as future government of a democratic Syria making it possible to bring an end to Bashar al-Assad's regime."

Six Arab states took the same step on Monday, though others wanted to wait. The new Syrian coalition was formed over the weekend in marathon negotiations in Doha, Qatar. Calling itself the "National Coalition for Revolutionary Forces and the Syrian Opposition," it remains to be seen whether the coalition can hold itself together.

An unresolved question is whether France and other countries should sell arms to the opposition coalition, to help in their fight against the regime of Syria's president Bashar al-Assad. Many countries are reluctant to do so, for fear that the weapons will end up in the hands of al-Qaeda linked terrorists, as has happened with the weapons in Libya's storehouses. Daily Star (Beirut) and Today's Zaman (Istanbul)

The Dalai Lama, in Japan, criticizes China over Tibet

In the East Asia Sea, Chinese warships and Japanese Coast Guard ships have circling around each other and the Sankaku/Diaoyu islands, which both countries claim, so there's no need for any additional tension between the two countries. But there are indeed increased tensions, as China becomes infuriated over a visit by the hated Tibetan spiritual leader, the Dalai Lama, to Tokyo. Even worse, the Dalai Lama took advantage of the visit to criticize China for its policy in Tibet. In response, China's Foreign Ministry said:

"China is firmly opposed to any country or any person’s supporting the Dalai’s separatist activities in any way. Japanese right-wing forces have been blatantly supporting Dalai’s anti-China separatist activities and interfering in China’s internal affairs, which China strongly condemns."

China has been embarrassed in recent weeks by a surge in Tibetan suicides by self-immolation. China blames the Dalai Lama for the suicides, saying that he was sacrificing lives "to achieve his goal of Tibetan independence." AFP

(Comments: For reader comments, questions and discussion, see the 14-Nov-12 World View -- Raucous EU-IMF confrontation lightens mood around Greece's bailout disaster thread of the Generational Dynamics forum. Comments may be posted anonymously.) (14-Nov-2012) Permanent Link
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