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EYE-BALL Opinion on – The IMF goes cap in hand to the US …

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The IMF goes cap in hand to the US …
The newly appointed IMF Managing Director Christine Lagarde has made an approached to the US for additional financial aid to prop up ailing European Nations who face default scenarios over DEBT levels.

The ABC story appears below:

IMF chief goes cap in hand to US

| Updated April 04, 2012 10:51:34 |

International Monetary Fund managing director Christine Lagarde has implored the United States to bolster debt-ridden European countries.

Speaking in Washington, Ms Lagarde said the 187-nation IMF needed more firepower to tackle financial crises raging around the globe, arguing it was in the interests of the US to pitch in and help Europe.

“Americans might ask themselves: why should what happens in the rest of the world concern us? Don’t we have our own problems?” she said.

“The answer is simple: In today’s world, we cannot afford the luxury of staying in our own mental backyards.

“If the European economy falters, the American recovery and American jobs would be in jeopardy, so America has a large stake in how Europe fares – and how the world fares.”

Ms Lagarde’s comments came 64 years to the day after president Harry Truman signed the Marshall Plan, an unprecedented loan to rebuild post-war Europe.

But they will be anathema to politicians in Washington as the country hurtles toward elections in November.

US officials, including Treasury Secretary Timothy Geithner, have for months trod a thin line between supporting the IMF’s efforts to bolster its resources and actually kicking in some more cash.

Washington has yet to ratify 2010 reforms that would see it send $61.2 billion in additional funding to the IMF’s coffers as part of a new quota agreement.

Americans might ask themselves: why should what happens in the rest of the world concern us? Don’t we have our own problems? The answer is simple: in today’s world, we cannot afford the luxury of staying in our own mental backyards.
IMF managing director Christine Lagarde

With the US mired in high levels of debt, increasing IMF funding or shipping tens of billions of dollars abroad to help Europe could be tantamount to political suicide.

Unperturbed, Ms Lagarde said Europe’s recent efforts to shore up its own financial “firewall” must prompt the rest of the world to pitch in.

“The Europeans have moved first with their firewall, the time has come to increase our firepower,” she said.

“The ratio of Fund quotas to world GDP is significantly lower today than in the past. Sixty years ago, it was as much as three, four times higher. We’ve a lot of ground to make up.”

Ms Lagarde has asked members to give her $500 billion in extra funds to fight financial crises, including for possible future eurozone bailouts.

But at a fraught meeting of finance ministers and central bank chiefs in Mexico City in February, Group of 20 economies said they would only boost IMF funding if the eurozone first put its hand in its pocket.

After a month of wrangling and some German resistance, on Friday the eurozone clinched a deal it claimed was worth more than $971 billion, putting the ball back in the IMF’s court.

Ms Lagarde insisted the IMF offered the US a solid bet.

“The IMF is a good investment for all our members, including the United States. Your money is not drawn upon until needed. Your money earns interest. Your money is used prudently – our programs always carry rigorous conditions to ensure their effectiveness,” she said.

“No member country has ever lost money by contributing to IMF resources – and I assure you that will not change on my watch.”

We all rush to blame America for so much of what is wrong with the global economy and the political corruption around the world. Yet – they are the first call to bail out military scenarios and financial aid.

Legarde is new to her role as IMF boss,  and what she has to consider that 70 odd years Europe got themselves into a mess that needed America to help them out of.   What fee has Europe paid to the US for the NATO protection and the ‘big-stick’ America had during the cold-war period?

For that matter – what ongoing cost have Europe put up to help the US off-set the terror war, the drugs war, and the countless other military skirmishes that everybody expects the US to fund and put lives on the line.

The financial problems of Europe are generic and endemic – Europe have to make the sacrifices – yes it will impact on global growth but if a bail-out happens – rich fat-cats will survive and live to place the world in the same exposition in another 20-30 years.

If Lagarde is serious – and with America – put some of those responsible for the GFC in jail and recoup the hidden billions taken out of the system.

This ‘cry-poor’ concept and have America bail Europe out of the hole they dug for themselves at a time when America is having the same problems, yet still forking out aid to 100’s of impoverished Nations – is s sign of just how weak Europe is.  Lagarde is French – and they are renown for their aversion of hardship – if this is the best she can do – this ‘beggar’ type performance is a very poor start to her role as the Head of the IMF.

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