As Greece struggles to avoid a default to the International Monetary Fund on foreign debt, the head of the IMF Christine Lagarde announces that the organization could lend money to Ukraine even if Ukraine cannot return its debt.
The current bailout for Greece expires on June 30 when Athens is expected to repay the IMF around €1.6bn. Lagarde said if the payment is not made on time, Greece will be declared to be in default and would disqualify itself from receiving any further IMF funds.
As was noted by Raul Maijer, Christine Lagarde is taking a hard stance towards Greece which is causing damage to the IMF and its reputation.
“When she said there was an urgent need for dialogue ‘with adults in the room’ adding ‘we can only arrive at a resolution if there is a dialogue, right now we’re short of a dialogue,’ she is causing enormous damage to the IMF and its future standing in the world with such juvenile statements,” wrote Raul Maijer.
Maijer elaborated that there are many IMF member nations who now know they can and must expect to be treated in the same way if there will ever be a conflict involving their nation and the Fund.
Ironically, as Greece is nearing a full-blown financial collapse, Lagarde stresses the importance of supporting Ukraine saying, “I… welcome the government's continued efforts to reach a collaborative agreement with all creditors". "This is important since this means that the Fund will be able to continue to support Ukraine through its Lending-into-Arrears Policy even in the event that a negotiated agreement with creditors in line with the program cannot be reached in a timely manner."
Elaborating on the statement by the IMF chief, Tyler Durden who wrote for Zero Hedge said that the IMF’s hypocrisy is clearly visible and until Greece, just like Ukraine, is willing to part with its $4 billion in gold, it faces major banking crisis.
Durden concludes by saying, “Greece has sold all of its 112.5 tons of official gold to unknown buyers. A transaction which would buy Greece about 3-6 months of can-kicking and a few stray smiles from Chrstine Lagarde.”
