IMF Violates IMF Rules, to Continue Ukraine Bailouts
The IMF, whose bailout operations are absorbed by the taxpayers in the member countries whenever a particular bailed-out nation defaults, announced on Friday, June 19th, that it will “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.” Though this new “Lending-into-Arrears” policy violates two IMF rules, it was justified by the IMF’s Managing Director Christine Lagarde on the basis of the Ukrainian government’s “continued efforts to reach a collaborative agreement with all creditors.”
In other words: a statement by Ukraine’s government that it wants to reach an agreement with its private creditors is being used by the IMF as if it were an excuse to extend into the indefinite future the IMF’s continued taxpayer-guaranteed financing of (‘lending’ to) the Ukrainian government, despite the fact that the IMF is violating two of the IMF’s own most-basic rules restricting its lending-authority — these rules are lending-restrictions whose purpose was to reduce the riskiness of the IMF’s lending, and so to minimize the amount that the IMF will be taking from taxpayers to fund its losses:
1: The IMF does not lend to nations at war — but Ukraine continues being at war against its former Donbass region despite the Minsk II ceasefire agreement; ceasefire violations, especially by the Ukrainian side, continue regularly.
2: The IMF does not lend to nations that are likely to default — but every independent source categorizes Ukraine as being virtually certain to default, and the only actual question regarding Ukraine is: when? The IMF’s answer: we’ll keep lending, building Ukraine’s public debt even higher, until our aim is achieved, and then we won’t — and that’s when the default will occur — the default will happen when we decide it will happen. It will happen when we will stop lying and saying that it won’t happen.
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