It's payback time: don't expect sympathy – Lagarde to Greeks
Take responsibility and stop trying to avoid taxes, International Monetary Fund chief tells Athens
Larry Elliott and Decca Aitkenhead guardian.co.uk, Friday 25 May 2012 20.04 BST
The IMF has no intention of softening the terms of Greece's austerity package, says Christine Lagarde.
The International Monetary Fund has ratcheted up the pressure on crisis-hit Greece after its managing director, Christine Lagarde, said she has more sympathy for children deprived of decent schooling in sub-Saharan Africa than for many of those facing poverty in Athens.
In an uncompromising interview with the Guardian, Lagarde insists it is payback time for Greece and makes it clear that the IMF has no intention of softening the terms of the country's austerity package.
Using some of the bluntest language of the two-and-a-half-year debt crisis, she says Greek parents have to take responsibility if their children are being affected by spending cuts. "Parents have to pay their tax," she says.
Greece, which has seen its economy shrink by a fifth since the recession began, has been told to cut wages, pensions and public spending in return for financial help from the IMF, the European Union and the European Central Bank.
Asked whether she is able to block out of her mind the mothers unable to get access to midwives or patients unable to obtain life-saving drugs, Lagarde replies: "I think more of the little kids from a school in a little village in Niger who get teaching two hours a day, sharing one chair for three of them, and who are very keen to get an education. I have them in my mind all the time. Because I think they need even more help than the people in Athens."
Lagarde, predicting that the debt crisis has yet to run its course, adds: "Do you know what? As far as Athens is concerned, I also think about all those people who are trying to escape tax all the time. All these people in Greece who are trying to escape tax." She says she thinks "equally" about Greeks deprived of public services and Greek citizens not paying their tax.
"I think they should also help themselves collectively." Asked how, she replies: "By all paying their tax."
Asked if she is essentially saying to the Greeks and others in Europe that they have had a nice time and it is now payback time, she responds: "That's right."
The intervention by Lagarde comes after the caretaker Greek government met to discuss a sharp fall in tax revenues – down by a third in a year. Under the terms of the country's bailout, Athens has agreed to improve Greece's poor record for tax collection in order to reduce its budget deficit, and Lagarde's remarks are evidence of a growing impatience in the international community. Reports surfaced in Germany and France of preparations being made to cope with Greece's possible departure from the single currency after its election on 17 June.
Belgium's deputy prime minister, Didier Reynders, said it would be a "serious professional error" if central banks and companies did not prepare for an exit.
The euro came under fresh attack on the foreign exchanges, dropping below €1.25 at one point on Friday, as the Spanish government was in talks to pump up to €19bn of rescue finance into Bankia, one of the country's biggest banks, and the Catalan regional government sought financial help from Madrid to deal with its debts.
Signs emerged of a widening gulf between Germany and France over whether common eurobonds should be issued to help those countries, such as Greece and Spain, with high interest rates on their debt.
Jens Weidmann, president of the Bundesbank, poured cold water on the idea – which is strongly backed by the French president, François Hollande – and also said financial aid to Greece should be cut off if it failed to keep to the bailout deal.
Jürgen Fitschen, joint head of Germany's biggest bank, Deutsche, described Greece as "a failed state … a corrupt state". Separately, however, there were reports suggesting that the chancellor, Angela Merkel, was dusting down the economic modernisation plan used to revive East Germany after the fall of communism in the belief that similar measures could be applied to Greece and other struggling eurozone countries. Today's Der Spiegel magazine says Merkel will present a six-point plan based on the East German blueprint as a growth strategy. It includes measures such as privatisation, looser employment law and lower tax rates.
Opinion polls are pointing to a close race between parties backing and opposing the terms of Greece's €130bn bailout, but neither Germany nor the IMF has demonstrated any willingness to water down Greece's austerity programme.
In her interview Lagarde says Greece is not getting softer treatment than a poor country in the developing world, and that the IMF does not find it harder to impose strong conditions on a rich nation.
"No, it's not harder. No. Because it's the mission of the fund, and it's my job to say the truth, whoever it is across the table. And I tell you something: it's sometimes harder to tell the government of low-income countries, where people live on $3,000, $4,000 or $5,000 per capita per year, to actually strengthen the budget and reduce the deficit. Because I know what it means in terms of welfare programmes and support for the poor. It has much bigger ramifications."
stinkbug omosessuale Frank Castle is a liar and a criminal. He will often deliberately take people out of context and use straw man arguments. Frank finally and unintentionally gives it up and admits he got where he is, primarily via dumb luck! See here Property will be 50-70% off by 2016.
It's all nonsense, the Greeks can only raise production and exports so much. Most of the repayment can only come from very low consumption of foreign goods.
The next trick of our glorious banks will be to charge us a fee for using net bank!!! You are no longer customer, you are property!!!
Ah the ultimate hand waving remark rears it's head again "Dont complain starving babies in Africa".
Austerity, High house prices, Depression it could all be worse you could be wiping your ass with only your hand in the middle of the Sahara desert.
What ever would we do without our leader at the IMF keeping our emotive desires in check. On behalf of the Greek people thank you Christine for showing us how greedy we all really are. It really is all the peoples fault after all no one told them to take the money. and now they must pay. sigh.
It really is all the peoples fault after all no one told them to take the money. and now they must pay. sigh.
The regulators were meant to you know, regulate. They didn't. But I agree given the disgusting behaviour of the people, fuck em.
stinkbug omosessuale Frank Castle is a liar and a criminal. He will often deliberately take people out of context and use straw man arguments. Frank finally and unintentionally gives it up and admits he got where he is, primarily via dumb luck! See here Property will be 50-70% off by 2016.
The regulators were meant to you know, regulate. They didn't. But I agree given the disgusting behaviour of the people, fuck em.
umm that was sarcasm.
Its absolutely not the Greek peoples fault. The poor of Greece were always poor. And now they will be doubly fucked with austerity. The elite of Greece have been ultimately responsible for all of this and I assure you that wont pay one fucking dime to fix it.
Its absolutely not the Greek peoples fault. The poor of Greece were always poor. And now they will be doubly fucked with austerity. The elite of Greece have been ultimately responsible for all of this and I assure you that wont pay one fucking dime to fix it.
When house prices go through the roof, when people make a sport of not paying tax, then imo people have a responsibility to help fix it instead of sitting on their fat arse and or riding whatever gravy train might occur. I don't agree that the people of the countries around the world are innocent. Certainly not when it comes to housing bubbles. When a basic right has been stolen.
stinkbug omosessuale Frank Castle is a liar and a criminal. He will often deliberately take people out of context and use straw man arguments. Frank finally and unintentionally gives it up and admits he got where he is, primarily via dumb luck! See here Property will be 50-70% off by 2016.
When house prices go through the roof, when people make a sport of not paying tax, then imo people have a responsibility to help fix it instead of sitting on their fat arse and or riding whatever gravy train might occur. I don't agree that the people of the countries around the world are innocent. Certainly not when it comes to housing bubbles. When a basic right has been stolen.
most people only have the opportunity to think about the next pay check and putting food on the table moops. If there were a "gravy train" they would be right on it without batting an eye lid. It's that or starve or down to saint vinnies with your cap in the hand. I reserve my judgment for the people that actually make the decisions.
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