Monday, May 30, 2011

Lagarde heads for Brazil, can the Greek Crisis be contained to 10th June?

Nomination papers for the next IMF chief may be submitted up to 10th June. Interesting further reading on the "so far" non-contest is here. Read The Washington Post on Lagarde's trip from here.

I was at a lunch on Saturday which was briefly addressed by a French Professor of finance, Philippe Dessertine, whose latest book predicts the world as heading towards war, as a result of the present economic crisis. Around my lunch table there were mutterings of "pessimist", as he warned of the likely horrors ahead, but to my mind he seemed to make a very clear and well thought through argument. This is unusual in France where there seems little day to day recognition of the impact the eurozone crisis is likely soon to exact.

The role played by Christine Lagarde, the French Finance Minister, and presently favourite for the position at the top of the IMF, in the original bail out of Greece, seems little understood. France's exposure to the consequences of the debts accrued by the French led ECB, following the agreements made at the Euro Group Ecofin in May, 2010, where Lagarde became the effective senior national representative under Juncker's chairmanship, in the absence of the German Economics Minister, who was hospitaised as described on this blog at the time, seem yet to have been fully absorbed by the French population at large.

The non-eurocurrency nations of the world should take great care, that when the euro crisis finally explodes, and these facts and huge, unquantified debt exposures are brought to the attention of the French by the wily Germans, it may be best if the IMF had a non-involved leader to try to extricate the IMF at minimum costs to their contributing countries own Treasuries.

If Greece self-destructs after the deadline of 10th June for IMF nomination papers to be lodged, Christine Lagarde may win through. But can Greece continue to totter on for another twelve days, we shall see, so far the USA is giving no clue as to their intentions, one must wonder what concessions they are presently trying to extract?

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