Surely something must be done about Wikileaks.

Probably someone inside the IMF has, like so many of us, had far more than enough of the ongoing spectacle of the 'Greek debt crisis'. Similarly for the 'leak' of the Tsipras letter. Perhaps bringing the hypocrisy and machinations to light will assist in a more reasonable solution - or not. But this beats the usual Friday afternoon press dump as it puts the news beyond the deadlines for most Sunday editions, and I have to wonder how many publications have 'exclusives' on this story. Not the Guardian as I post this diary.

"It is not necessary to have hope in order to persevere."

A letter from Greek prime minister Alexis Tsipras questions whether the country "can trust" the lender.

The leaked remarks of International Monetary Fund officials suggesting the lender may threaten to pull out of Greece's bailout are eliciting anger in Athens and could jeopardize debt negotiations. The Huffington Post exclusively obtained a private letter on Saturday from Greek prime minister Alexis Tsipras to IMF managing director Christine Lagarde, demanding answers for some of the controversial comments in a March 19 teleconference between Poul Thomsen, IMF European director, Delia Velculescu, IMF chief of mission in Greece and IMF official Iva Petrova.

Wikileaks released a transcript of the phone conversation earlier on Saturday in which Thomsen and Velculescu indicate that only a new crisis would prompt both Greece and Germany to fulfill their obligations under the bailout agreement. Velculescu raises concerns that while more time may be needed to push the parties toward an agreement, postponing a meeting could be a "disaster."

Tsipras wants to know whether Thomsen and Velculescu's apparent belief that the IMF must rely on another crisis-inducing "credit event" to force Greece's hand "reflects the official IMF view." If so, Tsipras challenges the IMF to defend the policy, given accepted norms of negotiation.

Hat tip

IMF: Austerity and debt relief
Germany: Austerity
Greece: Debt relief

There are a lot of percentages discussed in the leaked discussion. My impression is that they are discussing targets for Greece to reach to gain debt relief, where IMF wants those targets low enough for Greece to get debt relief, but don't wnat to go low to quick because they need Greece to first accept another round of austerity.

The Commission appears to be mediating or something, and everyone else is irrelevant.

Or rather, the supposedly shocking release by Wikileaks of an IMF conversation about Greece and the debt crisis is pretty much what we all should have known all along. Because it's really just a restatement of the basic set up of the Troika in the first place. The IMF is there to reassure the more nervous members of the Eurozone that the EU itself, or the Commission, won't be able to just cave in in order to smooth over any idea of a crisis about the debt or the euro. That's why those more nervous members insisted that the IMF must be involved. The IMF is insistent that any long term solution to the Greek problem itself must involve debt relief: and not just extension of terms but a cut in the headline debt. That's the bit that the EU and the Commission cannot stomach.

It is almost certain that this leak was sanctions, with the intent of putting pressure on the principals, and was done via Wikileaks to create a fig leaf of plausible deniability. This isn't the first time in the Greek negotiations that there has been a leak from the IMF that appeared almost certain to have been authorized by the senior levels of the European team (Poul Thomsen is seen not just as powerful in the IMF but indispensable; he's their best kneecap breaker). The first about Thomsen telling the Eurogroup* in April 2015 that Greece needed debt relief. The leak took place an unheard-of two weeks after the event, strongly suggesting it came out of the IMF because it had become clear their message was ignored. The second was the one we mentioned earlier, the disclosure of a debt sustainability analysis (which has serious weight for the IMF procedurally) that showed that Greece needed debt reduction. The report said as clearly as you can in IMF-speak that its loans were not likely to be money good even in the event of very aggressive maturity extensions and interest rate reductions. Translation: if you don't make haircuts, you'll get a default down the road. That looked to be a staff rebelllion (again, likely at the European team level, which by all accounts had had it in dealing with Greece, plus by the IMF breaking its "no more Argentinas" rule of making loans that could not be repaid). As we discussed long form last year, Lagarde tamped down the media firestorm and kept the IMF in the deal.

... we are approaching something of a hazardous endgame.

Ever since the first Greek 'bailout' program was signed, in May 2010, the IMF has been violating its own "primary directive": the obligation not to fund insolvent governments. As a result, the IMF's leadership has been facing a revolt from its staff members who demand an exit strategy arguing that, if the EU continues to obstruct the debt relief necessary to restore the solvency of the Greek government, the IMF should leave the Greek program.

Five years on, this IMF-EU impasse continues, causing a one-third collapse of Greek GDP and fuelling hopelessness to a degree that has made real reform harder than ever.

...To recap, the Wikileaks revelations unveil an attrition war between a reasonably numerate villain (the IMF) and a chronic procrastinator (Berlin). We also know that the IMF is seriously considering bringing things to a head next July by dangling Greece once more over the abyss, exactly as in July 2015. Except that this time the purpose is to force the hand not of Alexis Tsipras, whose fresh acquiescence the IMF considers in the bag, but of the German Chancellor.

This is stupid.  It was stupid six damned years ago, and it's still stupid today.  For all the same reasons.  Every time we do this same damned thing every year or two, we say, "Alright, see y'all in another year or two when it fails again and Greece needs another bailout."

Some day the Greek government will quit screwing around and killing itself and its people.  I just hope all that happens before the fascists come to power and gain credibility off of it.

Be nice to America. Or we'll bring democracy to your country.