Exactly what does trigger an IMF intervention in a country?

ynotdu

Hi,
I have heard so much from broadcasting pundits since this crisis began does anybody know the specific charter the IMF have to bust in and basicly tell us what to do(all interest groups ignored)

I remember Argentina collapsed in the recent past,what happened next?

I have also heard a UK minister for finance spent the night on the phone basicly begging for money or the UK would have gone bankrupt the next morning?

I have heard in the 80,s that until the unions were *shown the books* Ireland was six weeks away from the same fate?

on a personal note I think if people revolt against An bord snip nua,s suggestions too much(unfair as it is to many)we could sink.
this recession is IMO worse than the 1930,s Depression as at least that was not Entirely global,this is!
I still hear many around me who think this is a *blip*that will pass.
I fear it could be a catastrophe if we cannot co-operate as a Nation?

Économiste Monétaire

The IMF doesn't 'bust in' anywhere, their assistance is provided upon request. It's usually the preferable (and only) option to sovereign debt default and capital flight. You ask them for a loan and the conditions of the loan are discussed between the state and IMF. The reforms are placed in a Letter of Intent and this is reviewed by the executive board of the IMF. 'One size fits all' policies (often referred to as the Washington Consensus) are mainly a thing of the past.

ynotdu

Économiste Monétaire wrote: »

The IMF doesn't 'bust in' anywhere, their assistance is provided upon request. It's usually the preferable (and only) option to sovereign debt default and capital flight. You ask them for a loan and the conditions of the loan are discussed between the state and IMF. The reforms are placed in a Letter of Intent and this is reviewed by the executive board of the IMF. 'One size fits all' policies (often referred to as the Washington Consensus) are mainly a thing of the past.

Thanks for the speedy reply.
They may not bust in but from what some pundits are saying The IMF seem to "make you an offer,you cant refuse!:eek:

Anybody know the answers to the other questions i asked ?

jhegarty

You would be left with an offer you can't refuse when you can't get credit any more.

Once the government can't borrow , not much choice left.

ynotdu

jhegarty wrote: »

You would be left with an offer you can't refuse when you can't get credit any more.

Once the government can't borrow , not much choice left.

Yes,thats why i fear this possible winter of discontent if interest groups dont pull together we may lose any rule of law at all,and the most vunerable will be the first to suffer:(

Time Magazine

ynotdu wrote: »

if interest groups dont pull together ... the most vunerable will be the first to suffer

Correct. So the next time you hear a union leader on the news refusing to even discuss pay cuts for their members, get your pitchfork out.

ynotdu

I would not just single out the unions,fas,ce Schemes.almost every semi state were corrupt in one form or another!

Benchmarking non taxpayers to those who were actually creating wealth was such a stupid unsustainable idea it makes the idea of a fifteen year dictatorship seem attractive!:(

Flamed Diving

ynotdu wrote: »

Thanks for the speedy reply.
They may not bust in but from what some pundits are saying The IMF seem to "make you an offer,you cant refuse!:eek:

Anybody know the answers to the other questions i asked ?

Golden rule #1: Journalists are sensationalist fools.

ynotdu

Flamed Diving wrote: »

Golden rule #1: Journalists are sensationalist fools.

Lol,yeah worst part is they Wiki most of what they print!
They are in the main a smug arrogant bunch(with exceptions)but even the best of them seem totally at a loss as to exacty how much we should panic!

Flamed Diving

ynotdu wrote: »

Lol,yeah worst part is they Wiki most of what they print!
They are in the main a smug arrogant bunch(with exceptions)but even the best of them seem totally at a loss as to exacty how much we should panic!

From most reliable estimates I have seen, if we continue spending as we do, with no cuts, we would be likely to run out credit in about 2-3 years. At this point, we would be talking about the IMF.

So, it's not quite the panic scenario the press would have you believe.

ynotdu

Flamed Diving wrote: »

From most reliable estimates I have seen, if we continue spending as we do, with no cuts, we would be likely to run out credit in about 2-3 years. At this point, we would be talking about the IMF.

So, it's not quite the panic scenario the press would have you believe.

here,s hoping you are right!
since we are told we are borrowing at e400 million a WEEK:eek:and have lost our status as a *safe place*to lend money to=our loans higher interest rates than most of Europe,how much would we owe then?

I thought we were all maxed out?


Lets party on Dudes for 2-3 years:D

Hasschu

In answer to the question "What happened after in Argentina. " The morning after the bust all the banks were closed. Advantage the poor. Most banks were doing limited hour business after 72 hours with restrictions on what percentage of your deposits you could withdraw. There was a run on consumables particularly canned goods, breakfast cereals and other immediately useful stuff. Most stores had nothing useful in stock by the fifth day. Production facilities closed everything from tractor factories to meat plants. The people took to the streets, highways, bridges blocked all over the country. The equivalent of the DAIL was under siege and the President had to lifted out by helicopter. Five different Presidents in a matter of weeks. The government in collaboration with the Central Bank sends the army into bank HQ to force banks to lend to essential industries such as electricity, gas, diesel, petrol, bakeries, meat plants and so on. Over a few months things stabilized, the depreciation in the currency was 66.6%, unemployment soared and exports picked up as imports plummeted. Banks tried to repossess farms and ran into armed resistance, workers took over places of business and ran them. Was it bad, it was worse than bad. Was it necessary, no. Would Argentine people have supported more short term pain for long term gain, now they would. At the time nobody was willing to make sacrifices and in the end everybody suffered. Argentina is a beautiful country with well educated, energetic and friendly people, much like Ireland. Why they self destruct economically and politically with regularity is beyond my comprehension.

Flamed Diving

Ireland and Argentina are not comparable cases.

jeepers101

When did all that happen in Argentina?

Flamed Diving

http://en.wikipedia.org/wiki/Argentine_economic_crisis_(1999–2002)

ynotdu

Hasschu wrote: »

In answer to the question "What happened after in Argentina. " The morning after the bust all the banks were closed. Advantage the poor. Most banks were doing limited hour business after 72 hours with restrictions on what percentage of your deposits you could withdraw. There was a run on consumables particularly canned goods, breakfast cereals and other immediately useful stuff. Most stores had nothing useful in stock by the fifth day. Production facilities closed everything from tractor factories to meat plants. The people took to the streets, highways, bridges blocked all over the country. The equivalent of the DAIL was under siege and the President had to lifted out by helicopter. Five different Presidents in a matter of weeks. The government in collaboration with the Central Bank sends the army into bank HQ to force banks to lend to essential industries such as electricity, gas, diesel, petrol, bakeries, meat plants and so on. Over a few months things stabilized, the depreciation in the currency was 66.6%, unemployment soared and exports picked up as imports plummeted. Banks tried to repossess farms and ran into armed resistance, workers took over places of business and ran them. Was it bad, it was worse than bad. Was it necessary, no. Would Argentine people have supported more short term pain for long term gain, now they would. At the time nobody was willing to make sacrifices and in the end everybody suffered. Argentina is a beautiful country with well educated, energetic and friendly people, much like Ireland. Why they self destruct economically and politically with regularity is beyond my comprehension.

WOW Hasschu,thank you for that!
A more comprehensive reply to the specific question what happened in Argentina after their last collapse i could not have asked for!
MUCH appreciated!
thank you.

ynotdu

Flamed Diving wrote: »

Ireland and Argentina are not comparable cases.

Hi Flamed diving,that does not put it beyond the realms of possibility that Ireland COULD descend into that dark place,if We ALL dont behave responsibly in the tough times ahead.

the wiki link you gave is leading to a page that says it is not about the topic,did You mean to copy and paste another link to Wiki?

I would be interested to read the Wiki page you meant to post.
kind regards

Flamed Diving

Does this work?

http://en.wikipedia.org/wiki/Argentine_economic_crisis_(1999–2002)

Anyway, just Google 'Argentina Economic Crisis' and you will find hundreds of pages to read on the topic. I recommend adding Joseph Stiglitz's name to the search term, he provides a critical account of the IMF's role in all this.

Anyway, in life, anything is in the realm of possibility, and anything COULD happen. What matters is whether something is likely to happen or not. In my opinion, whether the countries economy collapses or not depends on the success of NAMA, particularly the short-term risks, such as discounting and transferring assets, and the effect that this will have on BOI/AIB balance sheets.

ynotdu

Flamed Diving wrote: »

Does this work?

http://en.wikipedia.org/wiki/Argentine_economic_crisis_(1999–2002)

Anyway, just Google 'Argentina Economic Crisis' and you will find hundreds of pages to read on the topic. I recommend adding Joseph Stiglitz's name to the search term, he provides a critical account of the IMF's role in all this.

Anyway, in life, anything is in the realm of possibility, and anything COULD happen. What matters is whether something is likely to happen or not. In my opinion, whether the countries economy collapses or not depends on the success of NAMA, particularly the short-term risks, such as discounting and transferring assets, and the effect that this will have on BOI/AIB balance sheets.

Yes that link works GREAT!

proably one of the things slowing down any hope of quick recovery is the uncertanty about what will happen next here.
NAMA is still such an unknown quantity,as is how the Nation will react to the December budget.
it is all uncharted territory:eek:


P.S the Econimist magazine rates our chances of defaulting on our loans at 15%.I thought we would be given a higher level of possible default.

Flamed Diving

ynotdu wrote: »

Yes that link works GREAT!

proably one of the things slowing down any hope of quick recovery is the uncertanty about what will happen next here.
NAMA is still such an unknown quantity,as is how the Nation will react to the December budget.
it is all uncharted territory:eek:


P.S the Econimist magazine rates our chances of defaulting on our loans at 15%.I thought we would be given a higher level of possible default.

Well, we still have one the lowest debt-to-gdp ratios in the world, although this will of course rise, but if we can keep it below 120%, we have a chance.

We are part of the Euro, which means we won't suffer from Argentina's exchange rate issues (above). This is a major factor.

The EU may allow us to conduct NAMA OBS, meaning that they won't penalise us severely for short-term deficits (i think).

Also part of this, we would be more likely to receive ECB liquidity, should they ever decide we are deserving of some.

There are some positives in there.

1huge1

Flamed Diving wrote: »

http://en.wikipedia.org/wiki/Argentine_economic_crisis_(1999–2002)

http://en.wikipedia.org/wiki/Argentine_economic_crisis_%281999%E2%80%932002%29

your missing a bit