The Committee for the Abolition of Illegitimate Debt (CADTM) draws attention to two IMF documents dating from March and May 2010 that were kept secret. These authentic documents were placed at the disposal of the Truth Committee on Greek Public Debt by Zoe Konstantopoulou, the President of the Hellenic Parliament in office from 6 February to 3 October 2015.
Their contents are damning. They clearly show that a large number of IMF Executive Board members expressed severe criticism of the programme the Institution was preparing to implement. Some of them denounced the fact that the programme was aimed at rescuing the private European banks – mainly certain major French and German banks— who were creditors of Greek debt, both public and private. Several of them denounced the selfsame policies that had led to the Asian crisis of 1996-1997 and the Argentine crisis in 2001.
Several executives denounced the fact that the principal executive officers (mainly the Managing Director Dominique Strauss-Kahn and the Deputy Director John Lipsky) had, unbeknownst to the other members of the Board, modified one of the fundamental rules that condition credits allocated by the IMF to its members. Indeed, for a loan to be granted by the IMF, it must be shown that this loan and the accompanying programme will render debt repayment sustainable.
This condition could not be satisfied in the case of Greece, since the IMF directorate and the European authorities refused to reduce the Greek debt or to make private banks contribute.
Therefore the above-mentioned condition was deleted on the sly, and replaced by a new criterion: the need to avoid a high risk of international systemic financial destabilization. The IMF’s Management invoked urgency to justify this totally irregular change of the rules.
To persuade the IMF executives who were the most reticent, the French, German and Dutch directors lied, each promising that their country’s banks would not disengage from Greek bonds. They claimed that the French, German and Dutch banks would hold onto their Greek bonds to enable the newly-starting programme to succeed.
Since then it has been proven that the French, German and Dutch banks massively sold off the bonds they held on the secondary market, thus aggravating the Greek crisis and transferring to European tax-payers, especially Greek tax-payers, the burden of the risks they had taken and of the crisis which was largely their fault.