Daar de VS feitelijk aan de touwen trekt bij het IMF en de Wereldbank, besloot het IMF niet langer garant te staan voor leningen, die bijvoorbeeld Rusland aan andere landen heeft verstrekt, zoals de hiervoor aangeduide lening van 3 miljard dollar aan Oekraïne. Met andere woorden maande het IMF deze landen en in dit voorbeeld Oekraïne, de lening van Rusland simpelweg niet terug te betalen!! Sterker nog: voorwaarde voor een lening van het IMF, is het niet terugbetalen van schulden aan Rusland of China....... Hiervoor moest het IMF de regels tijdens het spel aanpassen, een schoftenstreek van enorme grootte!! Oekraïne was normaal gesproken niet zo maar in aanmerking gekomen voor een lening van het IMF of de Wereldbank, vanwege de bestaande schuld aan Rusland, maar kan nu gewoon miljarden extra lenen en het eerder geleende geld in de zak steken.
Voor een lening van het IMF en de Wereldbank moet wel een fiks deel van de soevereiniteit worden ingeleverd en zal het land het neoliberale systeem moeten invoeren, waarbij de bevolking uiteraard de klos is, zoals de Grieken dat nu dagelijks merken: leven in armoede en zelfs met een baan, zullen velen in armoede blijven steken, daar de salarissen gigantisch naar beneden werden bijgesteld........ Uiteraard moeten zoveel mogelijk staatseigendommen worden verkocht, zoals openbare nutsvoorzieningen, waar mensen bijvoorbeeld veel meer zullen moeten betalen voor water, de gezondheidszorg en scholing........
Hier het artikel van Information Clearing House, waarin e.e.a. uit de doeken wordt gedaan, een lang artikel, maar uiterst verhelderend:
The
IMF Changes its Rules to Isolate China and Russia
By
Michael Hudson - Guns
and Butter
Dr.
Hudson discusses his paper, The IMF Changes Its Rules To Isolate
China and Russia; implications of the four policy changes at the
International Monetary Fund in its role as enforcer of
inter-government debts; the Shanghai Cooperation Organization (SCO)
as an alternative military alliance to NATO; the Asian Infrastructure
Investment Bank (AIIB) threatens to replace the IMF and World Bank;
the Trans Pacific Partnership Treaty; the China International
Payments System (CIPS); WTO investment treaties; Ukraine and Greece;
different philosophies of development between east and west; break up
of the post WWII dollarized global financial system; the world
dividing into two camps.
Posted
February 05, 2016
A
New Global Financial Cold War
By
Michael Hudson
A
nightmare scenario of U.S. geopolitical strategists is coming true:
foreign independence from U.S.-centered financial and diplomatic
control. China and Russia are investing in neighboring economies on
terms that cement Eurasian integration on the basis of financing in
their own currencies and favoring their own exports. They also have
created the Shanghai Cooperation Organization (SCO) as an alternative
military alliance to NATO.[1] And
the Asian Infrastructure Investment Bank (AIIB) threatens to replace
the IMF and World Bank tandem in which the United States holds unique
veto power.
More
than just a disparity of voting rights in the IMF and World Bank is
at stake. At issue is a philosophy of development. U.S. and other
foreign investment in infrastructure (or buyouts and takeovers on
credit) adds interest rates and other financial charges to the cost
structure, while charging prices as high as the market can bear
(think of Carlos Slim’s telephone monopoly in Mexico, or the high
costs of America’s health care system), and making their profits
and monopoly rents tax-exempt by paying them out as interest.
By
contrast, government-owned infrastructure provides basic services at
low cost, on a subsidized basis, or freely. That is what has made the
United States, Germany and other industrial lead nations so
competitive over the past few centuries. But this positive role of
government is no longer possible under World Bank/IMF policy. The
U.S. promotion of neoliberalism and austerity is a major reason
propelling China, Russia and other nations out of the U.S. diplomatic
and banking orbit.
On
December 3, 2015, Prime Minister Putin proposed that Russia “and
other Eurasian Economic Union countries should kick-off consultations
with members of the SCO and the Association of Southeast Asian
Nations (ASEAN) on a possible economic partnership.”[2]Russia
also is seeking to build pipelines to Europe through friendly secular
countries instead of Sunni jihadist U.S.-backed countries locked into
America’s increasingly confrontational orbit.
Russian
finance minister Anton Siluanov points out that when Russia’s 2013
loan to Ukraine was made, at the request of Ukraine’s elected
government, Ukraine’s “international reserves were barely enough
to cover three months’ imports, and no other creditor was prepared
to lend on terms acceptable to Kiev. Yet Russia provided $3 billion
of much-needed funding at a 5 per cent interest rate, when Ukraine’s
bonds were yielding nearly 12 per cent.”[3]
What
especially annoys U.S. financial strategists is that this loan by
Russia’s National Wealth Fund was protected by IMF lending
practice, which at that time ensured collectability by withholding
credit from countries in default of foreign official debts, or at
least not bargaining in good faith to pay. To cap matters, the bonds
are registered under London’s creditor-oriented rules and courts.
Most
worrisome to U.S. strategists is that China and Russia are
denominating their trade and investment in their own currencies
instead of dollars. After U.S. officials threatened to derange
Russia’s banking linkages by cutting it off from the SWIFT
interbank clearing system, China accelerated its creation of the
alternative China International Payments System (CIPS), and its own
credit card system to protect Eurasian economies from the threats
made by U.S. unilateralists.
Russia
and China are simply doing what the United States has long done:
using trade and credit linkages to cement their diplomacy. This
tectonic geopolitical shift is a Copernican threat to New Cold War
ideology: Instead of the world economy revolving around the United
States (the Ptolemaic idea of America as “the indispensible
nation”), it may revolve around Eurasia. As long as global
financial control remains grounded in Washington at the offices of
the IMF and World Bank, such a shift in the center of gravity will be
fought with all the power of an American Century (and would-be
American Millennium) inquisition.
Any
inquisition needs a court system and enforcement vehicles. So does
resistance to such a system. That is what today’s global financial,
legal and trade maneuvering is all about. And that is why today’s
world system is in the process of breaking apart. Differences in
economic philosophy call for different institutions.
To
U.S. neocons the specter of AIIB government-to-government investment
creates fear of nations minting their own money and holding each
other’s debt in their international reserves instead of borrowing
dollars, paying interest in dollars and subordinating their financial
planning to the U.S. Treasury and IMF. Foreign governments would have
less need to finance their budget deficits by selling off key
infrastructure. And instead of dismantling public spending, a broad
Eurasian economic union would do what the United States itself
practices, and seek self-sufficiency in banking and monetary policy.
Imagine
the following scenario five years from now. China will have spent
half a decade building high-speed railroads, ports, power systems and
other construction for Asian and African countries, enabling them to
grow and export more. These exports will be coming online to repay
the infrastructure loans. Also, suppose that Russia has been
supplying the oil and gas energy for these projects on credit.
To
avert this prospect, suppose an American diplomat makes the following
proposal to the leaders of countries in debt to China, Russia and the
AIIB: “Now that you’ve got your increased production in place,
why repay? We’ll make you rich if you stiff our adversaries and
turn back to the West. We and our European allies will support your
assigning your nations’ public infrastructure to yourselves and
your supporters at insider prices, and then give these assets market
value by selling shares in New York and London. Then, you can keep
the money and spend it in the West.”
How
can China or Russia collect in such a situation? They can sue. But
what court in the West will accept their jurisdiction?
That
is the kind of scenario U.S. State Department and Treasury officials
have been discussing for more than a year. Implementing it became
more pressing in light of Ukraine’s $3 billion debt to Russia
falling due by December 20, 2015. Ukraine’s U.S.-backed regime has
announced its intention to default. To support their position, the
IMF has just changed its rules to remove a critical lever on which
Russia and other governments have long relied to ensure payment of
their loans.
The
IMF’s role as enforcer of inter-government debts
When it comes to enforcing nations to pay inter-government debts, the IMF is able to withhold not only its own credit but also that of governments and global bank consortia participating when debtor countries need “stabilization” loans (the neoliberal euphemism for imposing austerity and destabilizing debtor economies, as in Greece this year). Countries that do not privatize their infrastructure and sell it to Western buyers are threatened with sanctions, backed by U.S.-sponsored “regime change” and “democracy promotion” Maidan-style. The Fund’s creditor leverage has been that if a nation is in financial arrears to any government, it cannot qualify for an IMF loan – and hence, for packages involving other governments. That is how the dollarized global financial system has worked for half a century. But until now, the beneficiaries have been U.S. and NATO lenders, not been China or Russia.
When it comes to enforcing nations to pay inter-government debts, the IMF is able to withhold not only its own credit but also that of governments and global bank consortia participating when debtor countries need “stabilization” loans (the neoliberal euphemism for imposing austerity and destabilizing debtor economies, as in Greece this year). Countries that do not privatize their infrastructure and sell it to Western buyers are threatened with sanctions, backed by U.S.-sponsored “regime change” and “democracy promotion” Maidan-style. The Fund’s creditor leverage has been that if a nation is in financial arrears to any government, it cannot qualify for an IMF loan – and hence, for packages involving other governments. That is how the dollarized global financial system has worked for half a century. But until now, the beneficiaries have been U.S. and NATO lenders, not been China or Russia.
The
focus on a mixed public/private economy sets the AIIB at odds with
the Trans-Pacific Partnership’s aim of relinquishing government
planning power to the financial and corporate sector, and the
neoliberal aim of blocking governments from creating their own money
and implementing their own financial, economic and environmental
regulation. Chief Nomura economist Richard Koo, explained the logic
of viewing the AIIB as a threat to the U.S.-controlled IMF: “If the
IMF’s rival is heavily under China’s influence, countries
receiving its support will rebuild their economies under what is
effectively Chinese guidance, increasing the likelihood they will
fall directly or indirectly under that country’s influence.”[4]
This
was the setting on December 8, when Chief IMF Spokesman Gerry Rice
announced: “The IMF’s Executive Board met today and agreed to
change the current policy on non-toleration of arrears to official
creditors.” Russian Finance Minister Anton Siluanov accused the IMF
decision of being “hasty and biased.”[5] But
it had been discussed all year long, calculating a range of scenarios
for a sea change in international law. Anders Aslund, senior fellow
at the NATO-oriented Atlantic Council, points out:
The IMF staff started contemplating a rule change in the spring of 2013 because nontraditional creditors, such as China, had started providing developing countries with large loans. One issue was that these loans were issued on conditions out of line with IMF practice. China wasn’t a member of the Paris Club, where loan restructuring is usually discussed, so it was time to update the rules.
The IMF intended to adopt a new policy in the spring of 2016, but the dispute over Russia’s $3 billion loan to Ukraine has accelerated an otherwise slow decision-making process.[6]
The
target was not only Russia and its ability to collect on its
sovereign loan to Ukraine, but China even more, in its prospective
role as creditor to African countries and prospective AIIB borrowers,
planning for a New Silk Road to integrate a Eurasian economy
independent of U.S. financial and trade control. The Wall Street
Journal concurred that the main motive for changing the rules was the
threat that China would provide an alternative to IMF lending and its
demands for crushing austerity. “IMF-watchers said the fund was
originally thinking of ensuring China wouldn’t be able to foil IMF
lending to member countries seeking bailouts as Beijing ramped up
loans to developing economies around the world.”[7] So
U.S. officials walked into the IMF headquarters in Washington with
the legal equivalent of suicide vests. Their aim was a last-ditch
attempt to block trade and financial agreements organized outside of
U.S. control and that of the IMF and World Bank.
The
plan is simple enough. Trade follows finance, and the creditor
usually calls the tune. That is how the United States has used the
Dollar Standard to steer Third World trade and investment since World
War II along lines benefiting the U.S. economy. The cement of trade
credit and bank lending is the ability of creditors to collect on the
international debts being negotiated. That is why the United States
and other creditor nations have used the IMF as an intermediary to
act as “honest broker” for loan consortia. (“Honest broker”
means being subject to U.S. veto power.) To enforce its financial
leverage, the IMF has long followed the rule that it will not sponsor
any loan agreement or refinancing for governments that are in default
of debts owed to other governments. However, as the afore-mentioned
Aslund explains, the IMF could easily
change its practice of not lending into [countries in official] arrears … because it is not incorporated into the IMF Articles of Agreement, that is, the IMF statutes. The IMF Executive Board can decide to change this policy with a simple board majority. The IMF has lent to Afghanistan, Georgia, and Iraq in the midst of war, and Russia has no veto right, holding only 2.39 percent of the votes in the IMF. When the IMF has lent to Georgia and Ukraine, the other members of its Executive Board have overruled Russia.[8]
After
the rules change, Aslund later noted, “the IMF can continue to give
Ukraine loans regardless of what Ukraine does about its credit from
Russia, which falls due on December 20.[9]
The
IMF rule that no country can borrow if it is in default to a foreign
government was created in the post-1945 world. Since then, the U.S.
Government, Treasury and/or U.S. bank consortia have been party to
nearly every major loan agreement. But inasmuch as Ukraine’s
official debt to Russia’s National Wealth Fund was not to the U.S.
Government, the IMF announced its rules change simply as a
“clarification.” What its rule really meant was that it would not
provide credit to countries in arrears to the U.S. government, not
that of Russia or China.
It
remains up to the IMF board – and in the end, its managing director
– whether or not to deem a country creditworthy. The U.S.
representative can block any foreign leaders not beholden to the
United States. Mikhail Delyagin, Director of the Institute of
Globalization Problems, explained the double standard at work: “The
Fund will give Kiev a new loan tranche on one condition: that Ukraine
should not pay Russia a dollar under its $3 billion debt. … they
will oblige Ukraine to pay only to western creditors for political
reasons.”[10]
The
post-2010 loan packages to Greece are a case in point. The IMF staff
saw that Greece could not possibly pay the sums needed to bail out
French, German and other foreign banks and bondholders. Many Board
members agreed, and have gone public with their whistle blowing.
Their protests didn’t matter. President Barack Obama and Treasury
Secretary Tim Geithner pointed out that U.S. banks had written credit
default swaps betting that Greece could pay, and would lose money if
there were a debt writedown). Dominique Strauss-Kahn backed the hard
line US- European Central Bank position. So did Christine Lagarde in
2015, overriding staff protests.[11]
Regarding
Ukraine, IMF executive board member Otaviano Canuto, representing
Brazil, noted that the logic that “conditions on IMF lending to a
country that fell behind on payments [was to] make sure it kept
negotiating in good faith to reach agreement with
creditors.”[12]Dropping
this condition, he said, would open the door for other countries to
insist on a similar waiver and avoid making serious and sincere
efforts to reach payment agreement with creditor governments.
A
more binding IMF rule is Article I of its 1944-45 founding charter,
prohibiting the Fund from lending to a member state engaged in civil
war or at war with another member state, or for military purposes in
general. But when IMF head Lagarde made the last loan to Ukraine, in
spring 2015, she merely expressed a vapid token hope there might be
peace. Withholding IMF credit could have been a lever to force peace
and adherence to the Minsk agreements, but U.S. diplomatic pressure
led that opportunity to be rejected. President Porochenko immediately
announced that he would step up the civil war with the
Russian-speaking population in the eastern Donbass region.
The
most important IMF condition being violated is that continued warfare
with the East prevents a realistic prospect of Ukraine paying back
new loans. The Donbas is where most Ukrainian exports were made,
mainly to Russia. That market is being lost by the junta’s
belligerence toward Russia. This should have blocked Ukraine from
receiving IMF aid. Aslund himself points to the internal
contradiction at work: Ukraine has achieved budget balance because
the inflation and steep currency depreciation has drastically eroded
its pension costs. But the resulting decline in the purchasing power
of pension benefits has led to growing opposition to Ukraine’s
post-Maidan junta. So how can the IMF’s austerity budget be
followed without a political backlash? “Leading representatives
from President Petro Poroshenko’s Bloc are insisting on massive tax
cuts, but no more expenditure cuts; that would cause a vast budget
deficit that the IMF assesses at 9-10 percent of GDP, that could not
possibly be financed.”[13]
By
welcoming and financing Ukraine instead of treating as an outcast,
the IMF thus is breaking four of its rules:
- Not to lend to a country that has no visible means to pay back the loan. This breaks the “No More Argentinas” rule, adopted after the IMF’s disastrous 2001 loan.
- Not to lend to a country that repudiates its debt to official creditors. This goes against the IMF’s role as enforcer for the global creditor cartel.
- Not to lend to a borrower at war – and indeed, to one that is destroying its export capacity and hence its balance-of-payments ability to pay back the loan.
- Finally, not to lend to a country that is not likely to carry out the IMF’s austerity “conditionalities,” at least without crushing democratic opposition in a totalitarian manner.
The
upshot – and new basic guideline for IMF lending – is to split
the world into pro-U.S. economies going neoliberal, and economies
maintaining public investment in infrastructure n and what used to be
viewed as progressive capitalism. Russia and China may lend as much
as they want to other governments, but there is no global vehicle to
help secure their ability to be paid back under international law.
Having refused to roll back its own (and ECB) claims on Greece, the
IMF is willing to see countries not on the list approved by U.S.
neocons repudiate their official debts to Russia or China. Changing
its rules to clear the path for making loans to Ukraine is rightly
seen as an escalation of America’s New Cold War against Russia and
China.
Timing
is everything in such ploys. Georgetown University Law professor and
Treasury consultant Anna Gelpern warned that before the “IMF staff
and executive board [had] enough time to change the policy on arrears
to official creditors,” Russia might use “its notorious debt/GDP
clause to accelerate the bonds at any time before December, or
simply gum up the process of reforming the IMF’s arrears
policy.”[14] According
to this clause, if Ukraine’s foreign debt rose above 60 percent of
GDP, Russia’s government would have the right to demand immediate
payment. But President Putin, no doubt anticipating the bitter fight
to come over its attempts to collect on its loan, refrained from
exercising this option. He is playing the long game, bending over
backward to behave in a way that cannot be criticized as “odious.”
A
more immediate reason deterring the United States from pressing
earlier to change IMF rules was the need to use the old set of rules
against Greece before changing them for Ukraine. A waiver for Ukraine
would have provided a precedent for Greece to ask for a similar
waiver on paying the “troika” – the European Central Bank
(ECB), EU commission and the IMF itself – for the post-2010 loans
that have pushed it into a worse depression than the 1930s. Only
after Greece capitulated to eurozone austerity was the path clear for
U.S. officials to change the IMF rules to isolate Russia. But their
victory has come at the cost of changing the IMF’s rules and those
of the global financial system irreversibly. Other countries
henceforth may reject conditionalities, as Ukraine has done, as well
as asking for write-downs on foreign official debts.
That
was the great fear of neoliberal U.S. and Eurozone strategists last
summer, after all. The reason for smashing Greece’s economy was to
deter Podemos in Spain and similar movements in Italy and Portugal
from pursuing national prosperity instead of eurozone austerity.
“Imagine the Greek government had insisted that EU institutions
accept the same haircut as the country’s private creditors,”
Russian finance minister Anton Siluanov asked. “The reaction in
European capitals would have been frosty. Yet this is the position
now taken by Kiev with respect to Ukraine’s $3 billion eurobond
held by Russia.”[15]
The
consequences of America’s tactics to make a financial hit on Russia
while its balance of payments is down (as a result of collapsing oil
and gas prices) go far beyond just the IMF. These tactics are driving
other countries to defend their own economies in the legal and
political spheres, in ways that are breaking apart the post-1945
global order.
Countering
Russia’s ability to collect in Britain’s law courts
Over the past year the U.S. Treasury and State Departments have discussed ploys to block Russia from collecting by suing in the London Court of International Arbitration, under whose rules Russia’s bonds issued to Ukraine are registered. Reviewing the excuses Ukraine might use to avoid paying Russia, Prof. Gelpern noted that it might declare the debt “odious,” made under duress or corruptly. In a paper for the Peterson Institute of International Economics (the banking lobby in Washington) she suggested that Britain should deny Russia the use of its courts as a means of reinforcing the financial, energy and trade sanctions passed after Crimea voted to join Russia as protection against the ethnic cleansing from the Right Sector, Azov Battalion and other paramilitary groups descending on the region.[16]
Over the past year the U.S. Treasury and State Departments have discussed ploys to block Russia from collecting by suing in the London Court of International Arbitration, under whose rules Russia’s bonds issued to Ukraine are registered. Reviewing the excuses Ukraine might use to avoid paying Russia, Prof. Gelpern noted that it might declare the debt “odious,” made under duress or corruptly. In a paper for the Peterson Institute of International Economics (the banking lobby in Washington) she suggested that Britain should deny Russia the use of its courts as a means of reinforcing the financial, energy and trade sanctions passed after Crimea voted to join Russia as protection against the ethnic cleansing from the Right Sector, Azov Battalion and other paramilitary groups descending on the region.[16]
A
kindred ploy might be for Ukraine to countersue Russia for
reparations for “invading” it and taking Crimea. Such a claim
would seem to have little chance of success (without showing the
court to be an arm of NATO politics), but it might delay Russia’
ability to collect by tying the loan up in a long nuisance lawsuit.
But the British court would lose credibility if it permits frivolous
legal claims (called barratry in English) such as President
Poroshenko and Prime Minister Yatsenyuk have threatened.
To
claim that Ukraine’s debt to Russia was “odious” or otherwise
illegitimate, “President Petro Poroshenko said the money was
intended to ensure Yanukovych’s loyalty to Moscow, and called the
payment a ‘bribe,’ according to an interview with Bloomberg in
June this year.”[17]The
legal and moral problem with such arguments is that they would apply
equally to IMF and U.S. loans. They would open the floodgates for
other countries to repudiate debts taken on by dictatorships
supported by IMF and U.S. lenders.
As
Foreign Minister Sergei Lavrov noted, the IMF’s change of rules,
“designed to suit Ukraine only, could plant a time bomb under all
other IMF programs.” The new rules showed the extent to which the
IMF is subordinate to U.S. aggressive New Cold Warriors: “since
Ukraine is politically important – and it is only important because
it is opposed to Russia – the IMF is ready to do for Ukraine
everything it has not done for anyone else.”[18]
In
a similar vein, Andrei Klimov, deputy chairman of the Committee for
International Affairs at the Federation Council (the upper house of
Russia’s parliament) accused the United States of playing “the
role of the main violin in the IMF while the role of the second
violin is played by the European Union, [the] two basic sponsors of
the Maidan – the … coup d’état in Ukraine in 2014.”[19]
Putin’s
counter-strategy and the blowback on U.S.-European relations
Having anticipated that Ukraine would seek excuses to not pay Russia, President Putin refrained from exercising Russia’s right to demand immediate payment when Ukraine’s foreign debt rose above 60 percent of GDP. In November he even offered to defer any payment at all this year, stretching payments out to “$1 billion next year, $1 billion in 2017, and $1 billion in 2018,” if “the United States government, the European Union, or one of the big international financial institutions” guaranteed payment.[20] Based on their assurances “that Ukraine’s solvency will grow,” he added, they should be willing to put their money where their mouth was. If they did not provide guarantees, Putin pointed out, “this means that they do not believe in the Ukrainian economy’s future.”
Having anticipated that Ukraine would seek excuses to not pay Russia, President Putin refrained from exercising Russia’s right to demand immediate payment when Ukraine’s foreign debt rose above 60 percent of GDP. In November he even offered to defer any payment at all this year, stretching payments out to “$1 billion next year, $1 billion in 2017, and $1 billion in 2018,” if “the United States government, the European Union, or one of the big international financial institutions” guaranteed payment.[20] Based on their assurances “that Ukraine’s solvency will grow,” he added, they should be willing to put their money where their mouth was. If they did not provide guarantees, Putin pointed out, “this means that they do not believe in the Ukrainian economy’s future.”
Implicit
was that if the West continued encouraging Ukraine to fight against
the East, its government would not be in a position to pay. The Minsk
agreement was expiring and Ukraine was receiving new arms support
from the United States, Canada and other NATO members to intensify
hostilities against Donbas and Crimea.
But
the IMF, European Union and United States refused to back up the
Fund’s optimistic forecast of Ukraine’s ability to pay in the
face of its continued civil war against the East. Foreign Minister
Lavrov concluded that, “By having refused to guarantee Ukraine’s
debt as part of Russia’s proposal to restructure it, the United
States effectively admitted the absence of prospects of restoring its
solvency.”[21]
In
an exasperated tone, Prime Minister Dmitry Medvedev said on Russian
television: “I have a feeling that they won’t give us the money
back because they are crooks … and our Western partners not only
refuse to help, but they also make it difficult for us.” Accusing
that “the international financial system is unjustly structured,”
he nonetheless promised to “go to court. We’ll push for default
on the loan and we’ll push for default on all Ukrainian debts,”
based on the fact that the loan
was a request from the Ukrainian Government to the Russian Government. If two governments reach an agreement this is obviously a sovereign loan…. Surprisingly, however, international financial organisations started saying that this is not exactly a sovereign loan. This is utter bull. Evidently, it’s just an absolutely brazen, cynical lie. … This seriously erodes trust in IMF decisions. I believe that now there will be a lot of pleas from different borrower states to the IMF to grant them the same terms as Ukraine. How will the IMF possibly refuse them?[22]
And
there the matter stands. On December 16, 2015, the IMF’s Executive
Board ruled that “the bond should be treated as official debt,
rather than a commercial bond.”[23] Forbes
quipped: “Russia apparently is not always blowing smoke. Sometimes
they’re actually telling it like it is.”[24]
Reflecting
the degree of hatred fanned by U.S. diplomacy, U.S.-backed Ukrainian
Finance Minister Natalie A. Jaresko expressed an arrogant confidence
that the IMF would back the Ukrainian cabinet’s announcement on
Friday, December 18, of its intention to default on the debt to
Russia falling due two days later. “If we were to repay this bond
in full, it would mean we failed to meet the terms of the I.M.F. and
the obligations we made under our restructuring.”[25]
Adding
his own bluster, Prime Minister Arseny Yatsenyuk announced his
intention to tie up Russia’s claim for payment by filing a
multibillion-dollar counter claim “over Russia’s occupation of
Crimea and intervention in east Ukraine.” To cap matters, he added
that “several hundred million dollars of debt owed by two state
enterprises to Russian banks would also not be paid.”[26] This
makes trade between Ukraine and Russia impossible to continue.
Evidently Ukraine’s authorities had received assurance from IMF and
U.S. officials that no real “good faith” bargaining would be
required to gain ongoing support. Ukraine’s Parliament did not even
find it necessary to enact the new tax code and budget
conditionalities that the IMF loan had demanded.
The
world is now at war financially, and all that seems to matter is
whether, as U.S. Defense Secretary Donald Rumsfeld had put matters,
“you are for us or against us.” As President Putin remarked at
the 70th session of the UN General Assembly regarding America’s
support of Al Qaeda, Al Nusra and other allegedly “moderate” ISIS
allies in Syria: “I cannot help asking those who have caused this
situation: Do you realize now what you have done? … I am afraid the
question will hang in the air, because policies based on
self-confidence and belief in one’s exceptionality and impunity
have never been abandoned.”[27]
The
blowback
America’s unilateralist geopolitics are tearing up the world’s economic linkages that were put in place in the heady days after World War II, when Europe and other countries were so disillusioned that they believed the United States was acting out of idealism rather than national self-interest. Today the question is how long Western Europe will be willing to forego its trade and investment interests by accepting U.S.-sponsored sanctions against Russia, Iran and other economies. Germany, Italy and France already are feeling the strains.
America’s unilateralist geopolitics are tearing up the world’s economic linkages that were put in place in the heady days after World War II, when Europe and other countries were so disillusioned that they believed the United States was acting out of idealism rather than national self-interest. Today the question is how long Western Europe will be willing to forego its trade and investment interests by accepting U.S.-sponsored sanctions against Russia, Iran and other economies. Germany, Italy and France already are feeling the strains.
The
oil and pipeline war designed to bypass Russian energy exports is
flooding Europe with refugees, as well as spreading terrorism.
Although the leading issue in America’s Republican presidential
debate on December 15, 2015, was safety from Islamic jihadists, no
candidate thought to explain the source of this terrorism in
America’s alliance with Wahabist Saudi Arabia and Qatar, and hence
with Al Qaeda and ISIS/Daish as a means of destabilizing secular
regimes in Libya, Iraq, Syria, and earlier in Afghanistan. Going back
to the original sin of CIA hubris – overthrowing the secular
Iranian Prime Minister leader Mohammad Mosaddegh in 1953 – U.S.
foreign policy has been based on the assumption that secular regimes
tend to be nationalist and resist privatization and neoliberal
austerity.
Based
on this assumption, U.S. Cold Warriors have aligned themselves
against democratic regimes seeking to promote their own prosperity
and resist neoliberalism in favor of maintaining their own
traditional mixed public/private economies. That is the back-story of
the U.S. fight to control the rest of the world. Tearing apart the
IMF’s rules is only the most recent chapter. Arena by arena, the
core values of what used to be American and European social
democratic ideology are being uprooted by the tactics being used to
hurt Russia, China and their prospective Eurasian allies.
The
Enlightenment’s ideals were of secular democracy and the rule of
international law applied equally to all nations, classical free
market theory (of markets free from unearned income and rent
extraction by special interests), and public investment in
infrastructure to hold down the cost of living and doing business.
These are all now to be sacrificed to a militant U.S. unilateralism.
Putting their “indispensable nation” above the rule of law and
parity of national interests (the 1648 Westphalia treaty, not to
mention the Geneva Convention and Nuremburg laws), U.S. neocons
proclaim that America’s destiny is to prevent foreign secular
democracy from acting in ways other than in submission to U.S.
diplomacy. Behind this lie the special U.S. financial and corporate
interests that control American foreign policy.
This
is not how the Enlightenment was supposed to turn out. Industrial
capitalism a century ago was expected to evolve into an economy of
abundance worldwide. Instead, we have American Pentagon capitalism,
with financial bubbles deteriorating into a polarized rentier economy
and a resurgence of old-fashioned imperialism. If and when a break
comes, it will not be marginal but a seismic geopolitical shift.
The
Dollar Bloc’s Financial Curtain
By treating Ukraine’s repudiation of its official debt to Russia’s National Wealth Fund as the new norm, the IMF has blessed its default. President Putin and foreign minister Lavrov have said that they will sue in British courts. The open question is whether any court exist in the West not under the thumb of U.S. veto?
By treating Ukraine’s repudiation of its official debt to Russia’s National Wealth Fund as the new norm, the IMF has blessed its default. President Putin and foreign minister Lavrov have said that they will sue in British courts. The open question is whether any court exist in the West not under the thumb of U.S. veto?
America’s
New Cold War maneuvering has shown that the two Bretton Woods
institutions are unreformable. It is easier to create new
institutions such as the AIIB than to retrofit the IMF and World
Bank, NATO and behind it, the dollar standard – all burdened with
the legacy of their vested interests.
U.S.
geostrategists evidently thought that excluding Russia, China and
other Eurasian countries from the U.S.-based financial and trade
system would isolate them in a similar economic box to Cuba, Iran and
other sanctioned adversaries. The idea was to force countries to
choose between being impoverished by such exclusion, or acquiescing
in U.S. neoliberal drives to financialize their economies under U.S.
control.
What
is lacking here is the idea of critical mass. The United States may
arm-twist Europe to impose trade and financial sanctions on Russia,
and may use the IMF and World Bank to exclude countries not under
U.S. hegemony from participating in dollarized global trade and
finance. But this diplomatic action is producing an equal and
opposite reaction. That is the Newtonian law of geopolitics. It is
propelling other countries to survive by avoiding demands to impose
austerity on their government budgets and labor, by creating their
own international financial organization as an alternative to the
IMF, and by juxtaposing their own “aid” lending to that of the
U.S.-centered World Bank.
This
blowback requires an international court to handle disputes free from
U.S. arm-twisting. The Eurasian Economic Union accordingly has
created its own court to adjudicate disputes. This may provide an
alternative to Judge Griesa’s New York federal kangaroo court
ruling in favor of vulture funds derailing Argentina’s debt
settlements and excluding that country from world financial markets.
The
more nakedly self-serving U.S. policy is – from backing radical
fundamentalist outgrowths of Al Qaeda throughout the Near East to
right-wing nationalists in Ukraine and the Baltics – then the
greater the pressure will grow for the Shanghai Cooperation
Organization, AIIB and related institutions to break free of the
post-1945 Bretton Woods system run by the U.S. State, Defense and
Treasury Departments and their NATO superstructure of coercive
military bases. As Paul Craig Roberts recently summarized the
dynamic, we are back with George Orwell’s 1984 global fracture
between Oceania (the United States, Britain and its northern European
NATO allies as the sea and air power) vs. Eurasia as the consolidated
land power.
Footnotes:
[1]
The SCO was created in 2001 in Shanghai by the leaders of China,
Russia, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan. India and
Pakistan are scheduled to join, along with Iran, Afghanistan and
Belarus as observers, and other east and Central Asian countries as
“dialogue partners.”
[2]
“Putin
Seeks Alliance to Rival TPP,” RT.com (December 04 2015). The
Eurasian Economic Union was created in 2014 by Russia, Belarus and
Kazakhstan, soon joined by Kyrgyzstan and Armenia. ASEAN was formed
in 1967, originally by Indonesia, Malaysia the Philippines, Singapore
and Thailand. It subsequently has been expanded. China and the AIIB
are reaching out to replace World Bank. The U.S. refused to join the
AIIB, opposing it from the outset.
[3]
Anton Siluanov, “Russia
wants fair rules on sovereign debt,” Financial Times, December
10, 2015.
[4]
Richard Koo, “EU
refuses to acknowledge mistakes made in Greek bailout,” Nomura,
July 14, 2015.
[5]
Ian Talley, “IMF
Tweaks Lending Rules in Boost for Ukraine,” Wall Street
Journal, December 9, 2015.
[6]
Anders Aslund, “The
IMF Outfoxes Putin: Policy Change Means Ukraine Can Receive More
Loans,” Atlantic Council, December 8, 2015. On Johnson’s
Russia List, December 9, 2015, #13. Aslund was a major defender of
neoliberal shock treatment and austerity in Russia, and has held up
Latvian austerity as a success story rather than a disaster.
[8]
Anders Åslund, “Ukraine
Must Not Pay Russia Back,” Atlantic Council, November 2, 2015
(from Johnson’s Russia List, November 3, 2015, #50).
[10]
Quoted in Tamara Zamyantina, “IMF’s dilemma: to help or not to
help Ukraine, if Kiev defaults,” TASS, translated on Johnson’s
Russia List, December 9, 2015, #9.
[12]
Reuters, “IMF
rule change keeps Ukraine support; Russia complains,” December
8, 2015.
[14]
Anna Gelpern, “Russia’s
Bond: It’s Official! (… and Private … and Anything Else It
Wants to Be …),” Credit Slips, April 17, 2015.
[15]
Anton Siluanov, “Russia wants fair rules on sovereign debt,”
Financial Times, op. cit.. He added: “Russia’s financing was not
made for commercial gain. Just as America and Britain regularly do,
it provided assistance to a country whose policies it supported. The
US is now supporting the current Ukrainian government through its
USAID guarantee programme.”
[16]
John Helmer, “IMF
Makes Ukraine War-Fighting Loan, Allows US to Fund Military
Operations Against Russia, May Repay Gazprom Bill,” Naked
Capitalism, March 16, 2015 (from his site Dances with Bears).
[17]
“Ukraine
Rebuffs Putin’s Offer to Restructure Russian Debt,” Moscow
Times, November 20, 2015, from Johnson’s Russia List, November 20,
2015, #32.
[18]
“Lavrov:
U.S. admits lack of prospects of restoring Ukrainian solvency,”
Interfax, November 7, 2015, translated on Johnson’s Russia List,
December 7, 2015, #38.
[20]
Vladimir Putin, “Responses
to journalists’ questions following the G20 summit,”
Kremlin.ru, November 16, 2015. From Johnson’s Russia List, November
17, 2015, #7.
“Lavrov:
U.S. admits lack of prospects of restoring Ukrainian solvency,”
November 7, 2015, translated on Johnson’s Russia List, December 7,
2015, #38.[21]
“In
Conversation with Dmitry Medvedev: Interview with five television
channels,” Government.ru, December 9, 2015, from Johnson’s
Russia List, December 10, 2015, #2[22]
[23]
Andrew Mayeda, “IMF
Says Ukraine Bond Owned by Russia Is Official Sovereign Debt,”
Bloomberg, December 17, 2015.
[24]
Kenneth Rapoza, “IMF
Says Russia Right About Ukraine $3 Billion Loan,” Forbes.com,
December 16, 2015. The article added: “the Russian government
confirmed to Euroclear, at the request of the Ukrainian authorities
at the time, that the Eurobond was fully owned by the Russian
government.”
[25]
Andrew E. Kramer, “Ukraine
Halts Repayments on $3.5 Billion It Owes Russia,” The New York
Times, December 19, 2015.
[26]
Roman Olearchyk, “Ukraine
tensions with Russia mount after debt moratorium,” Financial
Times, December 19, 2015.
[27]
“Violence
instead of democracy: Putin slams ‘policies of exceptionalism and
impunity’ in UN speech,” www.rt.com, September 29, 2015. From
Johnson’s Russia List, September 29, 2015, #2.
http://michael-hudson.com/
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Zet dit eens af tegen de enorme berg VS propagandafilms (die Goebbels jaloers zouden maken) waarin de VS altijd de goede partij en het slachtoffer is, neem de film; 'Jack Ryan: Shadow Recruit', hierin wordt de VS bijna het slachtoffer van o.a. financiële manipulaties door Rusland.... Uiteraard een belachelijk scenario, zoals in al deze films het geval is, maar wel met de bedoeling de kijkers te hersenspoelen met de idee, dat de de uiterst agressieve VS, dat in een flink deel van de wereld ongekende terreur brengt, de goede partij is, die continu het slachtoffer is van kwade manipulaties door landen als Rusland en China............
Voor meer berichten n.a.v. het voorgaande, klik op één van de labels,die u onder dit bericht aantreft, dit geldt niet voor de labels: AIIB, ASEAN, Aslund, CIPS, G. Rice, Hudson, Lavrov, SCO en Siluanov. Helaas kan ik maar een beperkt aantal labels plaatsen (maximaal 200 tekens.....).
