Why did the IMF lend so much to Greece?

In 2010 the IMF lent Euro 30 billion to Greece as part of a much larger package to support the ailing economy. The IMF explained at the time that it had lent 3200% of quota, well over its normal limits for a country in difficulty. It gave Greece “exceptional access to IMF resources”. The IMF cited the need to prevent the crisis spreading to other parts of the EU and to defend the Euro.

It is an extraordinary tale of bad decisions and policy that a first world country with many advantages in the world should end up a pensioner of the IMF, and should need such unusual treatment, getting far more in loans than very poor countries that are more normal recipients of IMF money and policy advice. The IMF recognised that Greece had both a severe fiscal problem (spending too much) and a competitiveness problem (not selling enough abroad to pay the bills). The IMF opined that in the Euro Greece needed to cut wage costs to tackle the latter and needed to cut spending. The IMF did not think a debt write down was needed, as it thought the running deficit was the main issue. It looked forward to a recovery in the Greek economy from 2012, after the cuts had depressed the economy in 2010-11.

In 2012 the IMF decided to lend Greece a new Euro 28bn as part of a replacement loan package. It drew attention this time to a “significant large competitiveness gap” (stronger language than 2010) and to a high level of public debt. This time it agreed with a major write down of privately held Greek public sector debt ( (75% written off) and required cuts in the Minimum wage as part of its measures to improve competitiveness. Once again Greece received special treatment with a large loan. I queried why the IMF would do this for a country which is no longer sovereign in monetary and economic matters, as its status with the Euro prevents a normal IMF recovery package.

So what will the IMF do and say now that Greece once again has asked for help? Why is Greece still locked into a competitiveness problem and a fiscal deficit problem? Why hasn’t the economy grown as the IMF once predicted? Why hasn’t Greece been able to see her way out of the trap the IMF identified in 2010 by following IMF policies?

It looks as if IMF programmes need a state to be able to keep its own banking system liquid by creating money, and need it to be able to devalue as part of the changes to offset the public spending cuts. Greece is unable to do this. It seems that the IMF was dragged into lending to a Eurozone member for political reasons, when it should have stayed out. The IMF would not lend to a UK County or to a state in the USA if they were in need of loans. The IMF would tell that government to seek cash from the domestic authorities. So why then does the IMF lend to Greece, when it is not a sovereign state and needs to look to the rest of the Eurozone and to the ECB for help? How will the IMF now get its money back? When will it explain the failure of its recovery policy for Greece?

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66 Comments

  1. Gary
    Posted March 2, 2015 at 6:08 am | Permalink

    The IMF are asset strippers. They make loans and impose terms of austerity so draconian that they can never be met. The country goes into default and the IMF reaps collateral.

    Look at their record.

    Greece should cut loose from the EU and the IMF and back the drachma with gold, or just use non counterfeitable cryptocurrency.

    • Ralph Musgrave
      Posted March 2, 2015 at 9:07 am | Permalink

      The IMF is not a charity. It lends out money obtained from taxpayers from sundry countries, and those taxpayers would be likely to cease funding the IMF if the IMF just threw money at any old poverty striken deserving country.

      I.e. the IMF adopts the same attitude as Walter Bagehot suggested in the case of central banks lending to commercial banks which have run out of money: lend to the latter, but at penalty rates and in exchange for first class collateral.

      • Mitchel
        Posted March 3, 2015 at 10:05 am | Permalink

        I’m not sure the IMF is such an objective,hard-nosed commercial entity as it used to be.It strikes me it is becoming increasingly political,entangling itself with the Western globalist agenda of one world governance and supporting the building blocks to achieve that end.The appointment of Mme Lagarde was not uncontroversial,given her intimate involvement in the Euro and EU projects and the need for these to be funded to avoid collapse.Also there was a view that a n0n-Western appointee would have brought a different perspective.

    • Hope
      Posted March 2, 2015 at 9:21 am | Permalink

      So what has Cameron done about it? He said the UK would not bail out Eurozone countries either directly or indirectly. We know he did not tell the truth with regard to Ireland, so has he knowingly allowed the IMF to help Greece in the way you describe?

      etc ed

    • Bob Reynolds
      Posted March 2, 2015 at 12:02 pm | Permalink

      Only problem with your suggestion is that Greece has no gold. It has been asked to privatise assets to raise collateral to reduce its deficit but is dragging its heels. It should exit Euro and float Drachma which will spread pain by devaluing massively. It then still has a mountain of debts denominated in Euros to service but at least it has better chance of recovering.

      • Mitchel
        Posted March 3, 2015 at 10:32 am | Permalink

        As a parallel, Ukraine is being asked to implement reforms similar to Greece with pressing urgency.It also has no gold now-it has recently been sent to the USA for safekeeping.No doubt when the US begins supplying weaponry (or anything else for that matter) it will do so in confidence of being repaid through possession of this collateral.Meanwhile,the EU and IMF loans received are vanishing into an internal black hole and Russian gas payments(with a further threat of disruption of supply over the weekend).

  2. Lifelogic
    Posted March 2, 2015 at 6:10 am | Permalink

    “It seems that the IMF was dragged into lending to a Eurozone member for political reasons, when it should have stayed out.”

    Clearly it was entirely political and achieved nothing. But why did Osborne give the IMF an extra £10Billion? of tax payer’s money to assist in this folly? How are his other foolish PIGIS loans coming along with the “profits” that we were promised?

    And why did Darling give £8 Billion away after he lost the last election – one assumes with an Osborne nod of support. Still it had, as he put it “stringent conditions attached”.

    http://news.bbc.co.uk/1/hi/uk/8672090.stm

    • Lifelogic
      Posted March 2, 2015 at 8:29 am | Permalink

      Why does Cameron only promise 200,000 discount houses for people under 40. After all his open door immigration in the 10s of thousands is more like 600,000. So why not promise 500,000 like the Greens or even 1 million. Why only for the under 40s, that is very age discriminatory for someone so keen on fake “equality” like Cameron.

      Perhaps next we will have not only gender neutral life insurance from Cameron but age neutral life insurance – after all we the absurdity of governments has few bounds.

      Cameron is highly unlikely to get back in, unless he finally get some sensible agenda in the few days left before the election and anyway no one expects him to do what he says (after his past serial ratting on the EU, the deficit, immigration and IHT). He is in the position of the Libdums and the Greens he can say whatever he wants to.

      Why not just promise the whole nation a free house each paid for by the magic money tree.

      • Dame Rita Webb
        Posted March 2, 2015 at 1:26 pm | Permalink

        Its too late now. Dave may end up with the most seats, however the psephologists say that most of the possible coalition permutations mean Red Ed is a shoe in for PM. Just imagine, that on May 8th, you wake up and find out that the 70s children’s TV character Samuel Tweet has moved into Number 10.

      • Mondeo Man
        Posted March 2, 2015 at 5:21 pm | Permalink

        Whatever the polls say I do not know one person who intends to vote Tory. I come from Tory supporting circles.

        The negative comments I read here and in response to online news articles are very similar to those I hear in real life. It is not a matter of Ukip trolls but people who are now refusing to vote Tory.

        As with the ERM debacle where they’d damaged their reputation on economics, they have shown themselves to be untrustworthy on mass immigration.

        I believe that the present economic ‘boom’ is baloney too.

        Reply 1.75 m people have found jobs. Current polls show more than twice as many proposing to vote Conservative as say they will vote UKIP.

        • Lifelogic
          Posted March 2, 2015 at 9:01 pm | Permalink

          To reply:- in other words Cameron is only taking 2/3 of the potential Tory vote due to his fake green, high tax, pro EU, big state, lefty approach. That, his failure to level the electoral playing field and his total lack of vision looks like causing him to lose a second sitting duck election.

          This despite Miliband working so hard to make Labour unelectable.

        • Dame Rita Webb
          Posted March 2, 2015 at 9:14 pm | Permalink

          Eh? How many of those 1.75m actually went to British people? While of the jobs themselves, how many of them come with a zero hours contract or with such a low pay packet you do not need to top them up with a handout from the state? If you are going to state subsidise jobs, why have you not got around to getting people to work doing something useful rather than flip hamburgers and make cups of coffee?

        • Mondeo Man
          Posted March 2, 2015 at 9:15 pm | Permalink

          Reply to reply:

          Most Ukip voters used to be Tory.

          That you have twice as many means you’ve lost somewhere between 20-30% – accepting that some have come from Labour.

          Employment:

          If revenue is up and welfare down then it can be considered a success. If, however, the appalling immigration figures are true then we’re not creating enough jobs to keep up.

          I believe the Trevor Kavanah piece in The Sun today to be this administration’s ERM moment. Trust permanently damaged.

          On the other hand. Are you really sure you want to win the election ? I can see the wheel coming off big time in the next administration.

      • Lifelogic
        Posted March 2, 2015 at 6:02 pm | Permalink

        I see Cameron said “the next Conservative government” will build. Will there ever be a next one. We have not had one for four terms and the next election looks like one chance in ten at best thanks to their lefty pro EU green drivel agenda. A house built by lots of lawyers and PPE grads seems rather unlikely. Far more likely to stop the build with red tape and injunctions.

        He should have said we will relax planning laws and get rid of the OTT green crap building control laws, give incentives to train more builder skills and engineers, sort out the utility connection companies lack of competition and get more competition in banking. Cheaper no Davey crap energy would make building far cheaper too.

      • Hope
        Posted March 2, 2015 at 7:57 pm | Permalink

        You mean the the whole of the EU with no local priority clauses from Tory local authorities. Cameron is literally overwhelming us with his mass immigration.

    • alan jutson
      Posted March 2, 2015 at 8:39 am | Permalink

      Lifelogic

      Agreed the IMF has got politics written all over it.

      Given we contribute to IMF funds, one would have thought we would have had a voice at the time.

      But alas silence, after all its only taxpayers money, and thats easily found.

      Yet another club we seem to contribute to, but get little back from, and we still have our own foreign aid programme, as well as making contributions to the EU version of the same.

      No wonder our taxes are going up !.

      • Lifelogic
        Posted March 2, 2015 at 6:07 pm | Permalink

        Indeed and with 60o,000 arriving, mainly on low incomes, we we are going to struggle with housing, schools, hospitals, road and the deficit. In the black by 2018 was it that Cameron said – yeah sure Dave.

    • Denis Cooper
      Posted March 2, 2015 at 10:40 am | Permalink

      From your link dated May 10th 2010:

      “Mr Darling said he had spoken to shadow chancellor George Osborne and Liberal Democrat counterpart Vince Cable about the situation but would not say how they had reacted.”

      Well, we found out later that Osborne went along with Darling’s decision that the UK would agree to an arguably illegal bailout of Greece, provided that it would not impose extra costs on the UK Treasury; then later in the same year when Merkel demanded an EU treaty change because she was worried that the German constitutional court would declare the bailout to be illegal under the existing treaties Cameron agreed to give her that EU treaty change without asking for anything substantive in return, and instead claimed it as a great achievement that the UK would not have to participate in any future eurozone bailouts, except of course through the IMF. Thus the expected “golden opportunity” to renegotiate the terms of our EU membership and extract concessions from the other EU countries came and went in 2010 without Cameron making any use of it; but nonetheless those leading the Tory party kept pretending to the public that it would happen in the future, and indeed we still hear that now.

    • Lifelogic
      Posted March 2, 2015 at 1:27 pm | Permalink

      Did I just hear the BBC say that Lord Hall described the licence fee as “profoundly democratic”. In what possible way is it democratic? Voters have no say whatsoever in the BBC purveyors of lefty, green crap, ever larger government propaganda at all. They just have to pay the licence fee under threat of imprisonment. The BBC is not only not democratic it distorts the UK’s real democracy with its drip drip or Guardian think drivel.

      Perhaps Oxford PPE grads have some bizzare definition of democracy (a shut up pay up the establishment knows best mode of democracy)?

      • Mitchel
        Posted March 3, 2015 at 10:15 am | Permalink

        Don’t you realise that the word “democratic” these days means socialist,it is just one example of the way the Left through its control of media and educational institutions has subverted the language.Using the word democratic doesn’t frighten the horses (or should I say sheep) in the same way socialist would.

  3. Gina Dean
    Posted March 2, 2015 at 6:12 am | Permalink

    This means we in the UK are on the hook for the debt as we invest money in the IMF. I was always under the impression that they never have lost money on their investment in countries.
    This time it seems someone has made an error of judgement by proping up Greece.

  4. agricola
    Posted March 2, 2015 at 7:42 am | Permalink

    Within your piece you ask the question and provide the answer. The driver is the political imperative, logic, common sense, and the purpose of the IMF are discarded.

    However much money anyone gives to Greece, they have no control of their economy because they are in the Euro.

    I suspect that you must look to the leadership of the IMF. Perhaps their belief in the EU project overrides their true purpose which is to help out sovereign states in financial trouble. Greece in being part of the Euro and a full member of the EU is no longer a sovereign state. In terms of the UK, caveat emptor, you still have your own currency , but 75% of the mechanism of sovereignty has been handed over to Brussels. Wake up the porridge is boiling over!

    • acorn
      Posted March 2, 2015 at 9:29 am | Permalink

      Neither the Eurozone or the EU are members of the IMF. The individual “Sovereign States” ARE the members of the IMF. Greece is a member; the UK is a member, not England. The USA is a member, Colorado and the other 49 States are not.

      But I agree with the rest. The two biggest reserve currencies in the IMF are the US Dollar and the Euro. The IMF and the ECB would struggle to survive if the Eurosystem failed. Remember, the IMF is like Switzerland without the cuckoo clocks; it has its own sovereign currency, the Special Drawing Right (SDR).

      • acorn
        Posted March 2, 2015 at 6:22 pm | Permalink

        JR, I appreciate we are getting close to the GE and the economic truth of the last five years won’t do Mr Osborne any favours. So I have simplified my post of the 27th, hoping it will pass moderation this time.

        The UK economy is lifting off three years late because of “austerity”. It is only lifting off recently because of the governments budget “deficit”; which is currently about £75 billion bigger than it was planned to be.

        The US was quicker into budget stimulus than the UK and it kept in on longer. The UK cut back to fast; the evidence is in the numbers. The US since 2013, is now cutting back to fast; the US economy will slow down this year. (In fact it has already slowed in Q4 2014 to 2.2%).

        Reply Utter nonsense. The UK deficit was larger in 2010=12 than more recently. The US has been cut more for four years and the US economy is just fine.

        • Lifelogic
          Posted March 3, 2015 at 12:22 am | Permalink

          The economy was held back from recovery because the banks were sucking the cash back from their customers over taxation and over regulation. Not by state sector “austerity”. Brown rescued the bank but failed to protect their customers who were often treated truly appallingly by them.

          State sector austerity is always a good think providing it is balanced by releasing the private sector from the balls and chains that the government chains them down with.

  5. agricola
    Posted March 2, 2015 at 7:53 am | Permalink

    Now we have got todays problem out of the way, can we get onto more serious topics.

    Where and how do we draw the line between MPs who have genuine careers outside Parliament, albeit part time and those that sell themselves for a pot of gold as a one man lobby group with insider knowledge.

    My own view is that second career MPs bring real life experience to government and should be encouraged . The school , university, gopher, safe seat route is an abomination. Those that take the street walker route are in my view criminal and should be dealt with within the law.

    Discuss.

    • A different Simon
      Posted March 2, 2015 at 5:37 pm | Permalink

      Agricola ,

      The career politician is a disaster but making being an MP just another job in a serial directors portfolio of interests is not the answer .

      The country is in crisis . We need dedicated full time MP’s , not part times ones .

      If someone wants to become an MP they should be required to resign directorships etc .

      The employment contract should become exclusive and the basic pay increased so that they should have no need or excuse to supplement their wages .

      • Mitchel
        Posted March 3, 2015 at 10:21 am | Permalink

        Didn’t you just love the way Rifkind described himself as self-employed (and under-employed);his parliametantary income presumably being an in-work benefit to top up to the level of entitlement that someone from his background should enjoy.

        • Lifelogic
          Posted March 4, 2015 at 7:53 am | Permalink

          And as not having a salary!

    • Hope
      Posted March 2, 2015 at 8:01 pm | Permalink

      Guido highlights over 64 percent of our laws come from the EU. We do not need all the gravy train politicos who use their position for self serving interests and greed. About 250 MP s and the same number of Lords would be more than adequate.

  6. They Work for Us?
    Posted March 2, 2015 at 7:56 am | Permalink

    We need look no further than the person who is the leader of the IMF, a French ex Finance Minister and no doubt an EU fan. This should have ensured that she was not selected but a truly independent leader chosen from an “uninvolved ” nation. We should not support the Eurozone by the back door in this way, yet another need for referendum law to ensure our leaders realise that they are temporary and ephemeral without the authority to do as they like.

    • nigel
      Posted March 2, 2015 at 8:23 am | Permalink

      Exactly.

    • oldtimer
      Posted March 2, 2015 at 8:48 am | Permalink

      I think you are on to something. The position of MD of the IMF is and has been a French preserve. Dominic Strauss-Kahn was MD in 2020, followed by Christine Lagarde from July 2011. Both are supporters of the EZ politically and, probably, emotionlly. From thre it was probably a small step, in their minds, to justify IMF intervention on the grounds of preserving global financial stability.

      The IMF is not, of course, the fount of all wisdom on financial matters; they got their predictions on the recent trajectory of the UK economy very wrong.

    • Denis Cooper
      Posted March 2, 2015 at 11:36 am | Permalink

      But the US government backed Lagarde to take over precisely because she would do whatever she could to keep the eurozone intact. As I recall there was another candidate, a Mexican I think, who was given short shrift.

  7. Richard1
    Posted March 2, 2015 at 7:58 am | Permalink

    It s absurd, the IMF excess funding was clearly a political attempt to shore up the euro. Germany and other solvent eurozone countries need to get real about Grece, and Greece needs to acquire the dignity to stand on her own two feet. Stop the begging and blackmail, get out of the euro, thereby imposing an automatic haircut on creditors (most of whom are now official bodies anyway) and look for policies which make Greece competitive and creditworthy again. If the people of Greece think the sort of Marxist nonsense espoused by Syrizia is the way to go fine, let them try it. But stop asking the rest of the world to pay. Eventually an independent Greece will elect a government which starts employing rational policies and restructures the Greek economy. Just like we did in the UK in 1979 when we replaced a left wing Labour government with Margaret Thatcher. In the UK, we should be wary of the anti-business Mr Miliband. Crisis and chaos can arrive very quickly, voters should not be hubristic. The direction of travel of Miliband’s Labour would take us in the direction of Greece.

    • Lifelogic
      Posted March 2, 2015 at 9:10 am | Permalink

      “In the UK, we should be wary of the anti-business Mr Miliband.”

      Indeed we should be, but the Libdems the Greens especially and much of the Tory party (& most of its leadership) are largely anti business and economically illiterate too. They all want more regulation, restrictive employment laws, higher minimum wages, idiotic equality nonsense, expensive greencrap energy, more EU nonsense, restrictive planning and a state sector far to large and incompetent to render the UK competitive …….

      • Richard1
        Posted March 2, 2015 at 11:26 am | Permalink

        The LibDems are broadly anti-business also I agree and the Greens are an absurd neo-Marxist party. I dont agree the Tories are anti-business but I do think they are unnecessarily apologetic about business. After all profit-seeking enterprises are the most dynamic force about for the improvement of peoples’ lives, living standards etc.

        • Lifelogic
          Posted March 2, 2015 at 9:16 pm | Permalink

          So why do the Tories retain absurd employment laws, absurd OTT regulations on almost everything, force expensive greencrap energy on to industry, increase 299 taxes and tax complexity, accept all the EU drivel, force pension admin and costs on to employers and even introduce absurd gender neutral annuities and insurance.

          • Richard1
            Posted March 3, 2015 at 8:23 pm | Permalink

            Well it’s far from perfect but Miliband would be far worse

  8. Ian wragg
    Posted March 2, 2015 at 8:27 am | Permalink

    Lagarde was a fully paid up Europhile. She used the IMF as lender of last resort for Europe. Many developing countries were hostile to her behaviour but she followed her instructions from Brussels regardless. No doubt to secure a good seat on the good old gravy train later.
    Greece is a basket case and should default immediately and return to the Drachma

  9. James Matthews
    Posted March 2, 2015 at 8:56 am | Permalink

    Umm. Could the answer be Dominique Strauss-Kahn (who was in charge at the time)?

  10. Ralph Musgrave
    Posted March 2, 2015 at 9:02 am | Permalink

    John Redwood’s reference to Greece as “a first world country” is debatable. On any objective criteria (GDP per head, corruption, etc) it has more in common with other countries in it’s region than Western Europe: former Yugoslavia, Romania, Bulgaria etc.

  11. Bert Young
    Posted March 2, 2015 at 9:17 am | Permalink

    The IMF support to Greece initially happened because the ECB had no authority to react without German consent . Of course the IMF were only interested in keeping the EZ intact and saw the intransigence in Greece as a stumbling block . Mdme. Lagarde may well have been motivated by her French background and the knowledge that French Banks were heavily exposed to the Greek debt .

    None of the above excuses the action the IMF took . They had – and still have many more deserving cases on their books where investment was and is justified . The ECB can now act with the nod from the Germans and the IMF can – and should take a back seat . I doubt that this will happen because the behind the scene complicity to make sure that Europe does not fall apart is still a major IMF policy .

  12. Martyn G
    Posted March 2, 2015 at 9:26 am | Permalink

    “…..In the UK, we should be wary of the anti-business Mr Miliband….” Wary? It is nowhere as good as that – we should all be absolutely terrified at the thought of him and his sidekicks ever getting their hands on the levers of power!
    Without exception it is a fact that every socialist government since WWII has departed office leaving the economy virtually wrecked, as most recently in the days of mssrs Blair, Balls and Brown.

  13. Roy Grainger
    Posted March 2, 2015 at 9:45 am | Permalink

    “So what will the IMF do and say now that Greece once again has asked for help?”

    Well we know the answer don’t we – they will lend them more.

  14. Leslie Singleton
    Posted March 2, 2015 at 9:50 am | Permalink

    Anyone remember as I do St Angela saying that it was preposterous that the EU should need or indeed allow the IMF to support a EU country?

  15. Peter Stroud
    Posted March 2, 2015 at 10:14 am | Permalink

    I suppose the IMF’s support of the Euro is understandable, bearing in mind its leadership, but as others have said: why is our chancellor and PM applauding its support of Greece? Applauding it to the extent of passing over money, we could ill afford.

    Doesn’t this show us clearly how our leaders are so besotted by the EU that the chance of a fair IN/OUT referendum is most unlikely? Are there enough MPs on the Tory side, who, like the writer of this piece, will fight to ensure the PM does not load the question in favour of an IN result?

    • Roy Grainger
      Posted March 2, 2015 at 11:30 am | Permalink

      I agree with you but the Scottish referendum provides an interesting case study. There the entire weight of the political establishment and business were deployed to achieve a fairly clear NO victory but polling suggests that is about to be entirely undermined by a massive swing to the SNP in the general election – with such an outcome the initial referendum result will soon be rendered ineffective. One could envisage the same thing on an EU vote with a NO leading to a general swing to UKIP.

  16. Denis Cooper
    Posted March 2, 2015 at 11:00 am | Permalink

    Off-topic, the opinion poll charts going back to the last general election have now been updated to the end of February:

    http://www.electoralcalculus.co.uk/polls.html

    Labour’s two-year downwards trend continues so that its level of support is converging with that for the Tories, which has been more or less flat over that period.

    However we know that in 2010 the Tories got 7% more votes than Labour but that was not quite enough to give them an overall majority; and of course the LibDems blocked the proposed boundary changes, so this time the Tories will still suffer from that bias in the electoral system to some uncertain degree.

    The LibDems have continued to drift down while the Greens have continued to drift up; while as for UKIP there are now strong indications that the previous upwards trend in its support has broken and it has peaked, in which case the question now is whether it will decline, or it will remain roughly where it is, over the next two months.

  17. Colin Hart
    Posted March 2, 2015 at 11:30 am | Permalink

    Ever since its inception the managing director of the IMF has been a European, more often than not a French person. A certain culture has thus been embedded.

    So when it looks as though the Great European Project is about to implode the IMF is bound to ride to its rescue and bail out the member countries creating the problem.

    It is a mystery why we had to join in as we did but so too is much of our external economic policy.

  18. Denis Cooper
    Posted March 2, 2015 at 11:31 am | Permalink

    Also off-topic, there has been another study of the proportion of our laws which come from the EU:

    http://order-order.com/2015/03/02/comprehensive-study-finds-64-7-of-uk-law-made-in-brussels/

    Taking into account all the EU regulations, which have direct effect and in most cases don’t even go anywhere near Parliament, their answer is 64.7%.

    OK, so realistically it should be expressed as something like “more than half” rather than being quoted to the first decimal place as in this study, but it certainly is not the mere 7% or 9% falsely claimed by the likes of Clegg.

    Guido finally asks: “If most of our laws and regulations are being made abroad without reference to parliament, do we really need full-time MPs in Westminster?”

    Of course the answer is “yes”, we will need them when we leave the EU and restore our national democracy.

  19. Roy Grainger
    Posted March 2, 2015 at 11:45 am | Permalink

    Totally off-topic, but a fantastic (in its original sense) speech by Tony Hall of the BBC welcoming the idea of “modernising” the license fee by imposing it as a poll tax on every household in the country, even the 500,000 which don’t have TVs. Can you imagine the backlash against any government stupid enough to try to implement that ?

  20. Ex-expat Colin
    Posted March 2, 2015 at 11:57 am | Permalink

    We still have to pay the Ukrainian Gas Bill…no worry. Thats after a good few Ukrainians paid their gas bills. I guess the UAE has the customer gas payments now for some non lethal stuff?

    When are these handouts going to cease…FFS!

  21. Mike Stallard
    Posted March 2, 2015 at 12:06 pm | Permalink

    Who runs the IMF?
    More Europe means freedom of movement of capital, goods, services and people and the problem within Europe is not going to be solved by nationalist governments. What is needed is to make one big sovereign state which, like USA, can transfer reserves where they are most needed regardless of out of date nationality which caused two world wars.

    I think these views pretty well answer your question Mr Redwood.

    PS I do not believe them either – so what are you going to do about it?

  22. PaulDirac
    Posted March 2, 2015 at 2:04 pm | Permalink

    The IMF was wrong to lend anything to Greece, because Greece couldn’t follow a reasonable trajectory to a recovery (can’t devalue, which is the first demand the IMF makes in all other cases).
    The IMF under DSK and now Lagarde acted as an extension to the EZ, in line with French interests, but with obvious agreement from the major stake holders (USA, UK etc.)
    I guess Greece will not default on the IMF money, as this would cut it’s only western lifeline, but even so, the IMF rules were completely broken (both the amounts of loan but mainly the conditions attached), and that should be of grave concern to all of us.

    It is sad that all those “smart” people at the IMF who knew the facts and who most certainly knew the likely result of the Troika’s rule over Greece, lacked the backbone to make a stand against the legal but doomed to failure loan to Greece.

  23. Margaret Brandreth-J
    Posted March 2, 2015 at 2:52 pm | Permalink

    As always the strong feed off the weak. I wonder what first class collateral would be ; a first world Country?

  24. DaveM
    Posted March 2, 2015 at 3:05 pm | Permalink

    Mr Redwood,

    Totally OT I’m afraid.

    I recall a reply from yourself last year which said “White paper December, vote in Jan/Feb”, and yet the silence on English votes is deafening.

    Is Mr Hague just procrastinating?

    With every MP seemingly intent on playing party politics and electioneering, would now not be a good time to stop wooing the celtic countries and start wooing the 85% who are likely to vote your party in at the next election? Or is the Conservative head strategist (or whatever he/she may be called) still in hibernation?

  25. ian
    Posted March 2, 2015 at 4:51 pm | Permalink

    People not working in the UK 9.100,000 bewteen the ages of 18-66 year olds.

    • Narrow Shoulders
      Posted March 3, 2015 at 8:03 am | Permalink

      But how many by choice?

      Stay at home mums, disability, long term unemployed? 9.1 million means nothing by itself.

    • Ted Monbiot
      Posted March 3, 2015 at 9:10 am | Permalink

      Does your figure include students of all ages, those working part time, those who have taken early retirement, those who do not work because they manage their home caring for children or elderly?

  26. petermartin2001
    Posted March 2, 2015 at 8:47 pm | Permalink

    When will it explain the failure of its recovery policy for Greece?

    We could ask the same questions of the EU commission and the ECB. Failures are something we all experience in life, at both a personal and a business level.

    The important thing is to recognise those failures at an early stage, learn the appropriate lessons, move on and try something different. That’s not happening with those who have prescribed the austerity medicine to Greece. Instead they have been arguing that Greece was making progress and it was important not to jeopardise that progress etc etc. It is hard to know how they can possibly think that with unemployment at 28% and a reduction in the Greek GDP of some 30% since the 2008 crash.

    There seems to be such a strong sense of groupthink in the EU that there will never be any admission of failure and that’s an extremely dangerous situation for all of us.

  27. Iain Gill
    Posted March 2, 2015 at 9:26 pm | Permalink

    Why did the British government hype house prices so much? Surely a more relevant question

    • petermartin2001
      Posted March 3, 2015 at 2:11 pm | Permalink

      Whether its relevant or not, the answer is that the government hasn’t deliberately hyped house prices. They are a consequence of an over reliance on monetary policy, ie low interest rates, to achieve relatively high levels of economic activity and therefore relatively low levels of unemployment.

      It may be thought that the problem was peculiar to the UK with its high population density. But, Australia, which follows very similar economic policies to the UK, but which has a much lower population density, also has the same problem of very low home affordability.

      So, to have lower house prices we need to have higher interest rates. The government needs use use a more intelligent mix of fiscal and monetary policies, to regulate the economy, rather than solely relying on the level of interest rates.

      • Iain Gill
        Posted March 3, 2015 at 6:05 pm | Permalink

        no they are hyped

        “help to buy” for one is nothing but a hype of the market

        tight planning rules is another

        open doors immigration is another

        forcing the banks (which they largely own after the bailout) to reduce foreclosures

        and so very much more

  28. ian
    Posted March 4, 2015 at 10:49 pm | Permalink

    Imf bail out greece with lot of money to save the french and german banks also to make them sell they best assets. i think the greece debt should go back to 50 billion euros as in 2008 and ecb imf french and german bank should pay for it.

  29. Lindsay McDougall
    Posted March 6, 2015 at 11:25 am | Permalink

    Just ask yourself: who is the Chief Executive of the IMF and what is her main motivation? To get the IMF to behave properly, a change at the top is needed.

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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