How does the IMF work, do we pay into it?

wylo

And if we do , how can they come in and "sort us out", if all were doing is borrowing back money that we already payed into?
I went to the website and while they give a brief explanation im not sure how much we pay to it, theres also little details of how much were getting from it.
Thanks

bobbyjoe

The IMF enter vulnerable economies then decimate them. Last thing we need.

grahamo

They are supposed to act as a 'lending arm'. Making credit available to the private sector. Their main aim is to try and increase employment.

DadaKopf

It would be an awful thing for the IMF to have to come in. Well, to be invited in. They exact very harsh measures on a country because they come loaded with a particular ideology which got us into this mess in the first place.

The IMF is a (US & UK-dominated) multilateral institution funded by its members. The Department of Finance makes 'replenishments' to some of its financing programmes (the EASF, I think), though pre-McCreevy, the rainbow government refused to pay into the IMF in protest against its apalling policies and the failure of those policies to achieve fair economic change and development. The FF government reversed this with little change in IMF policies.

The IMF's remit is to maintain global financial stability. I don't think the IMF has the cash to achieve this anyway.

Degsy

Word has it they're pretty much out of money themselves.

sovtek

grahamo wrote: »

They are supposed to act as a 'lending arm'. Making credit available to the private sector. Their main aim is to try and increase employment.

They always manage to increase un employment though. Any country that wants to retain sovereignty and their economy does not want their Freidmanite kleptocrats from the IMF in their business.

SkepticOne

bobbyjoe wrote: »

The IMF enter vulnerable economies then decimate them. Last thing we need.

I think the key thing as Dadacopf points out, they need to be invited in. They have no power whatsoever to enter a country without being invited by the legitimate authorities of that country. Then they enter into negotiations with that country as to how to get it back on its feet in return for a loan. Note that the economic damage is already done by the time the IMF gets there otherwise they would not be called upon.

So it is not so much a case of hoping they don't come but rather hoping that we don't mismanage our economy to the extent that the only institution remaining that is still willing to lend is the IMF.

Daroxtar

SkepticOne wrote: »

So it is not so much a case of hoping they don't come but rather hoping that we don't mismanage our economy to the extent that the only institution remaining that is still willing to lend is the IMF.

If they give money to countries who cant get it from anywhere else does that make them lenders in a sub prime market? I'm assuming they lend at a higher rate over longer periods so you have "negative equity" for most of your working life. What happens if/when the country defaults? Do they then own us? I can see already how this daftness ends up.

I'm thinkin stay the fk away from them. We dug the hole, we have to get out ourselves.

Bobeagleburger

Daroxtar wrote: »

If they give money to countries who cant get it from anywhere else does that make them lenders in a sub prime market? I'm assuming they lend at a higher rate over longer periods so you have "negative equity" for most of your working life. What happens if/when the country defaults? Do they then own us? I can see already how this daftness ends up.

I'm thinkin stay the fk away from them. We dug the hole, we have to get out ourselves.

yeah but look at the fools trying to get us out of it:eek:

Sand

The International Monetary Fund (IMF) is an organization of 185 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.

The IMF also lends to countries with balance of payments difficulties, to provide temporary financing and to support policies aimed at correcting the underlying problems; loans to low-income countries are also aimed especially at poverty reduction.

Quota subscriptions generate most of the IMF's financial resources. Each member country of the IMF is assigned a quota, based broadly on its relative size in the world economy. A member's quota determines its maximum financial commitment to the IMF and its voting power, and has a bearing on its access to IMF financing. Total quotas at end-August 2008 were SDR 217.4 billion (about $341 billion).

The US is obviously the biggest contributor/voter, providing 17%, for comparison purposes the UK provides rought 5%, Germany 6% and Ireland provides 0.39%

The IMF arent a charity - they come in when its clear a country has completely lost the run of itself. They provide a loan to get a country back on its feet so as to maintain the stability of the global economy, and demand changes to the countries fiscal and economic policies so that A) The loan is repaid and not merely wasted and that the errors that caused the country to lose the run of itself in the first place are corrected.

This causes some bitterness, because some people confuse the IMF with a charity.

We still have our fiscal destiny in our own hands, and thus have some control over our economic destiny. The IMF will only be called in if the international markets lose all faith in the government ability to get the fiscal policy under control and thus refuse to lend money to the government that we so desperately need to raise to keep the wheels on the bus.

So far, credibility is slipping away and the governent seems to want to avoid making hard decisions whereas the unions are playing politics. On this current trajectory, the IMF will probably be called in next year and the squeals from the unions and other special interests [ hospital consultants etc etc] will be heard across the world. Nothing will be sacred for the IMF when it comes to cutting the budget and if the government wants the money they need, they will have to comply. In effect, the IMF will approve the budget of this country - not the government.

CCCP^

Sand wrote: »

In effect, the IMF will approve the budget of this country - not the government.

Jesus, we'd be screwed. Absolutely screwed.