From Finance and Business Ethics webpage on facebook
Three
years since the IMF came to Greece at the request of the government at
that time, and after three Memorandums, the IMF admitted that it has
made a mistake in the Greek program and its projections as to the
effectiveness. Recession continues for five years, unemployment is
choking the Greek society, taxes have skyrocketed, wages have been cut
by 40 to 50 %, and so did pensions and many businesses have closed.
The IMF has also imposed austerity programs before Greece in Ireland and Iceland. Ireland has increased employment due to the export nature of some companies, but unemployment continues since the memorandum has imposed measures that takes away income from its citizens, but the austerity measures are applied at a slower pace so as not to be that visible compared to Greece.
American companies and investments have been attracted like magnets to Ireland due to its 10% corporate tax rate. When the IMF went to bail out Ireland, is due to the failure of its banking system. The case of Greece was different.
The Irish government decided to bail out the banks failures by guaranteeing all their debts, and promised to even pay the bondholders. Bankers and contractors were immune from any liabilities since the laws were very elastic.
The total amount of debt owed by banks was estimated at 70 billion euros, but they were not allowed to default. Instead of guanteeing bank deposits they used them to pay off debts.
In the case of Iceland, the government decided to do the opposite. They did not pay the banks external debt, they allowed the banks to default, and they devalued their currency by 50%. The effect was to increase prices by 50%.
Iceland decided to kick the IMF out was shut out of the financial markets, but lost its internal growth by 50%.
Although Ireland has attracted foreign investors it continues to have high unemployment. Greece is also trying to attract foreign investors. Will it have the same fate? Today is the decision to privatize the two energy and natural gas companies. The highest bidders will be announced...
