Another move away from U.S. hegemony could come soon as Europe mulls ditching the IMF
The International Monetary Fund (IMF) has a long reputation as being little more than a financial tool of the West used to impose U.S. hegemony on other nations through their getting them to borrow unsustainable debt.¬† And as we saw just a few years ago in Greece regarding negotiations over their own debt obligations, the IMF has little interest in aiding countries so that they can become economically sound sooner rather than later.
So it becomes very interesting when the EU is now mulling a possible disconnect from the international lending facility in favor of their own financial institutions that would be run and funded by the European Stability Mechanism (ESM).
Relations between Europe and the International Monetary Fund (IMF), which have carried out several bailout programs together, may change dramatically as the eurozone intends to replace the fund’s presence in bailouts.
The European Commission plans to give more responsibility to the European Stability Mechanism (ESM) which helps eurozone countries to borrow money. The ESM will monitor and enforce compliance with bailout programs while continuing to disburse funds.
“The euro area is more resilient now than in years past‚Ä¶ I believe the ESM should now progressively graduate into a European Monetary Fund which, however, must be firmly anchored in the European Union’s rules and competences,”¬†Jean-Claude Juncker, European Commission president, told lawmakers in September.
Analysts say by creating its own IMF the eurozone will deepen links within the union and thereby become more resilient to financial shocks. The move would also make Europe independent from the IMF each time a euro currency country needs financial rescue.
The eurozone wants to build up its own “firefighter” for potential future sovereign crises, chief economist at ING, Carsten Brzeski told CNBC.
“An EMF (European Monetary Fund) would also leave eurozone problems to be solved by the eurozone and not by outsiders,”¬†he said. ‚Äď¬†Russia Today
Over in the Far East the functions of the IMF have already been replaced with the Asian Infrastructure Investment Bank (AIIB), and through alternative channels such as the BRICS Bank.¬† Additionally, the EU is in the process of fighting an ideological war between the rise of populism and their wanting to solidify the Union under a single banner, where to achieve this it would require Brussels to have more authoritative infrastructures working if it truly wants to run the financial systems of all member nations.
From day one the IMF has been nothing more than an international body meant to enslave sovereign governments under the auspices of debt and draconian terms.¬† But its days now appear to be numbered, especially if one of their biggest supporters in Europe decides that they no longer need the financial body.
Kenneth Schortgen Jr¬†is¬†a writer for¬†The Daily Economist,¬†Secretsofthefed.com,¬†Roguemoney.net, and¬†Viral Liberty, and hosts¬†the popular¬†youtube podcast¬†on Mondays, Wednesdays and Fridays.¬†Ken can also¬†be heard Wednesday afternoons giving an weekly economic report on the¬†Angel Clark radio show.