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IMF’s Lagarde has a …….nerve

One thing the Right is really good at is turning a blind eye as diaster steadily builds up and then blaming everyone else when it happens. Osborne is a past master at this, ignoring the riskiness of deregulated banks and then trying to make the victims pay (‘We’re all in it together’). But Lagarde at the IMF really takes the biscuit. Saying that the Greeks should pay their taxes is a saloon bar absurdity.

The truth is that avoiding/evading taxes has become a cancer in politics everywhere, including Britain and her own France, but that’s not the root of the Greek problem at all. That derives, first, from the eagerness of the Eurocrats to wave Greece into the fold without any serious checks of its capacity to withstand long-term competition with German industry, and secondly from the equal eagerness of French and German banks to pour billions of euros into Greece without any proper assessment of the creditworthiness of the recipients.

The Right always blames the victims, especially when the market is structured against them and they have no chance of recuperating. IDS blames ‘feckless youth’ (his reference to 1,030,000 young unemployed people aged between 18-24) when Osborne’s economic policy of fiscal contraction makes it impossible for them to get a job. Lagarde blames feckless European southerners for over-spending when imprudent northerners were only too anxious to pour money into their vaults and gave not a thought about the viability of the Eurozone. Piling the misery and austerity on to Greece, Portugal and Ireland is a very convenient way of excusing the responsibility of the Euro leaders’ own banks.

Look beneath the surface and the landscape of liability looks very different from Lagarde shooting off her lip. Spain actually reined in its public finances better than France before 2007, and it was the private sector that triggered a colossal property bubble. France again has a total debt as a percentage of annual GDP (including when Lagarde was French finance minister) only slightly less than Spain or Italy. British tax avoidance/evasion is officially estimated by HMRC at £42bn a year, over a third of Britain’s entire budget deficit, and if Greece is significantly higher (though no-one, including Lagarde, actually knows the full truth), it’s because Greek corporate magnates and plutocrats have transferred huge sums of cash to tax havens, not because Greece indulged in an orgy of over-spending. I think we’ve had enough of pious homilies from Lagarde, on a tax-free £298,000 salary plus perks (at least £400,000 gross or £7,700 a week), before she tells the destitute in Greece like one of her French forebears “Let them eat cake”.


  1. Damian Hockney says:

    Nicely put and summarised…I would just add that rather than it just being “the right”, it is the entire political class who are following this line when they are in power – aren’t most who profess to be one or the other indistinguishable now?

    It is vital to dispel this myth that the Greek people are all early retiring tax dodgers, when the real fault for the crisis there lies elsewhere. I hear this propaganda all the time regurgitated by friends and colleagues as a kind of justification for onerous demands upon the Greek people and as a reason for the present crisis. There is little difference between Greece and many other EU countries in this regard.

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