03.06.2012 12

Taxpayers to fund more Greek bailouts

By Robert Romano — On March 13, the International Monetary Fund (IMF) Executive Board will be meeting to decide how much of the most recent €130 billion bailout it will be providing to Greece and her troubled creditors.

To date, the IMF, which U.S. taxpayers fund, committed a little less than €30 billion of the original €110 billion bailout. Another €50 billion has been also pledged to Portugal and Ireland in the course of the European sovereign debt crisis.

But that does not mean they’ll definitely get the next round of bailouts, right? After all, Treasury Secretary Timothy Geithner recently promised “it’s unlikely you’re going to see the major shareholders of the IMF be prepared to have the IMF play a larger response” in Greece.

So, game over, right? Wrong.

Conventional wisdom, such as from the Financial Times that “important decisions require a supermajority of 85 per cent of votes” or from Reuters that the “United States is the IMF’s largest contributor and has veto power to block decisions”, is incredibly misleading, says Americans for Limited Government (ALG) President Bill Wilson.

If that were true, with 16.75 percent of the vote at the IMF, the U.S. could block a bailout of any country in the world, including Greece. Except, it’s not true.

“It requires a simple majority of the IMF Executive Board to approve lending to any nation, including Greece,” Wilson said, citing research from the Congressional Research Service, Princeton University, and Cambridge University Press.

That means the U.S. “can do nothing to stop more taxpayer-funded bailouts of socialist governments in Europe and their lenders,” Wilson said, adding, “This is why the Pelosi-Reid led Democrat Congress in 2009 never should have approved an additional $108 billion of U.S. taxpayer money for the IMF to play with. But, the U.S. should nonetheless demand a public vote, and Lundsager should vote no.” IMF votes are very rare.

But Wilson said that unless there was one now, “the lack of a public vote will be viewed as tacit approval of bailing out Greece.”

Making matters worse, despite Geithner’s assurances to the contrary, the IMF at its March 13 meeting is preparing to provide between €18 billion and €21 billion of the new €130 billion loan, according to the Wall Street Journal. “Geithner clearly does not have the pulse of a majority of the IMF,” Wilson noted.

However, there is one decision the IMF will be making very soon that does require 85 percent approval, giving the U.S. veto power: Whether or not to reactivate the New Arrangements to Borrow (NAB).

Those need to be renewed at 6 month intervals “by participants representing 85 percent of total credit arrangements of participants eligible to vote and is then approved by the IMF’s Executive Board,” according to the IMF’s website.

The $564 billion NAB, which the U.S. provides $100 billion of, has twice been activated, in April and Oct. 2011. Since the U.S. has veto power over that decision, that means we supported the NAB’s two previous activations, which have already cost taxpayers over $7 billion of bailouts.

To activate it again, members will need to renew it once more in April, with U.S support.

The $7 billion given through the NAB comes atop $22 billion that has been used out of the nation’s $64 billion quota with the IMF.  This accounts about 20.4 percent of all current lending by the Fund.

We shouldn’t be providing any of these loans. It may not be able to stop the bailout of Greece, but the least the Obama Administration can do is to demand a public vote, and to direct the U.S. representative at the IMF to vote against it. In the meantime, Congress should be acting to rescind the additional $108 billion it gave to the IMF in 2009 — before it’s all gone.

Robert Romano is the Senior Editor of Americans for Limited Government.

  • eosbun

    Stop all bailouts now!

  • RegConserative

    Bend over here it comes !!

  • Phil

    Spend all your money while it’s still good.
    These morons are going to croak every currency in existance.
    Obama already bankrupt the U.S. it just hasn’t  hit us yet.
    Stop working grab a fishing rod and enjoy the last few days of the greatest nation that ever was.
    Don’t forget we have another debt ceiling crisis coming up.
    Right before elections too.
    Now the commie is giving even MORE mortgage bailouts.
    Keep printing that worthless monopoly money you morons.
    Skirting around the congress again too.
    It’s so obvious this guy is out to destroy America and our noodle spined leaders won’t stop him as is their constitutional duties.
    I guess I’ll just stop paying my bills now.
    Tell me Despot King Obama bin lyin. WHY SHOULD I!!
    You squandered the nations wealth on your fairy dust liberal dreams!
    The idiots who are going to vote you back in are the ones that will pay and suffer for it.
    My government no longer has my consent. They’ve more than earned it.
    Anyone else care to chime in on that?
    Time to Abolish and refound as it says in The Declaration of Independence.
    We are supposed to IGNORE them and any orders etc. that comes out of their tyrannical mouths.

  • Frank629

    my comments is simple…would greece bailout the USA .I THINK NOT.

  • Dean

    The major sharekolders of the IMF?  Besides the U.S. who is a major shareholder.

  • J.M.R.


  • pduffy

    The very purpose of the IMF was to redistribute the wealth of America to other nations after God blessed America. This is the purpose of the IMF! In order to accomplish this task, the scammers in government stole the money from us, the little ol taxpayer, then they setup this evil bank to redistribute our wealth to other nations. They are just doing what they intended to do from the beginning. Why would they veto this intent after doing all this work to obtain the goal? If course they are going to bail out Europe, because the real goal is to bankrupt America, not bail out Greece.

  • If this isn’t bad enough, most of the money will end up in the4 hands of the 1%. Absolute disgusting thieves

  • Yes, this should be put up for a public vote. This money being given to Greece does not benefit the American taxpayer at all, and the Ameican taxpayer should be given the opportunity to vote on this and many other foreign funding issues that should also be stopped Immediately.
     We the taxpayers of the united states should not be fleeced by the decisions made by our own goverment to gve our money away either in a bailout through the IMF or by contributions made by our Government in the form of Foreign Aid.
     If our Government officials want to give Foregn Nations Aid Packages they should do so with their own money, not the taxpayers money. Politicians can give as much of their own money out of their own private bank accounts as they wish, but when it comes to taxpayers money, No foreign Aid or Bailout Money should ever be given. Taxpayers money, money that is forced from the taxpayers by extortion (threat of jail by force) should only be used for the united states and in the united states. Period.

  • Greg137

    Greece WOULD be able to get btheir books in order in WE quit bailing them out!!!!!!!!

  • julian8

    A bail out or a subsidy???
    Since I am totally against a bail out for California who continues to live beyond their means on credit without dealing with fiscal responsibility it is obvious how I would feel about bailing out another nation that is doing the same.  Like California these people have not cleaned up their act and really do not want a bailout, they want someone to subsidize their lifestyle and Paul is the only one who has said he will not.

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