Foreign Affairs

McMorris Rodgers: US should be wary of IMF loan to Greece

McMorris Rodgers: US should be wary of IMF loan to Greece

McMorris-Rodgers Warns IMF’s LaGarde:

Don’t Renegotiate Euro-Bailouts With Our Money

 

By John Gizzi

 

In the wake of International Monetary Fund Managing Director Christine LaGarde’s comment last week that Greece should get two more years to meet some of the target conditions of its$167 billion bailout package, the top U.S. congressional skeptic of funding the IMF warned: “Don’t.”

“I am concerned by Madame LaGarde’s suggestion that we should renegotiate the bailout agreements that Greece and other European countries voluntarily agreed to, accepting literally hundreds of billions of bailout dollars from other countries, including the United States,” House GOP Conference Chairman Cathy McMorris Rodgers (Wash.) told Human Events Thursday night.

McMorris Rodgers, who is No. 4 among the House GOP leadership as well as Mitt Romney’s chief liaison with House Republicans, warned that “renegotiating those (loan) agreements essentially means allowing those countries — which have spent and borrowed beyond their means for years — to  increase their spending and borrowing even more.  That is exactly the wrong approach.”

LaGarde’s suggestion about a longer repayment period for the European recipients of bailout packages and the resulting broadside from McMorris Rodgers come 10 months after the two met in the congresswoman’s Washington, D.C. office.  Deeply concerned that the $173 billion U.S. tax dollars Congress voted to the IMF — $108 billion in additional funding approved by Congress in 2009, plus its $65 billion in regular IMF contributions — might be lost due to the financial titan’s bailouts of Greece, Portugal and Ireland, McMorris Rodgers introduced H.R, 2313 to rescind the $108 billion package and apply it to the U.S. deficit.

During their 45-minute meeting, the lawmaker told us, she learned from LaGarde that roughly 16 percent of the $173 billion that went to the IMF in 2009, or about $27.68 billion on all IMF projects worldwide, was spent on the controversial bailouts of the three European countries wallowing in red ink.

Referring to what she called “the excellent, productive meeting I had with Cathy McMorris Rodgers,” LaGarde told Human Events in April that “we need to demonstrate … the efficiency of the IMF, the fact that we don’t give money, we don’t give grants, we give loans. We are paid back. The loans generate interest for the creditors. It is money that is well-managed.”

In July of this year, however, a concerned McMorris Rodgers wrote the IMF chief warning that “given the outcome of the recent Greek elections,  pressure is already growing on the IMF to ease the fiscal conditions that were included in the Greek bailouts.  I encourage you to hold steadfast and insist that Greece live up to the agreements it already agreed to.”  (emphasis added).

Clearly, LaGarde was moving in an opposite direction when she told a press conference during the IMF’s annual meeting in Tokyo last week that Athens should get two more years to meet some of its target conditions and “it is sometimes better to have more time.”

Not when U.S. tax dollars are at stake, says McMorris Rodgers.  As she put it,  “Congress has a right to ensure that our money is being used wisely and effectively.  Madame LaGarde’s comments raise fresh doubts about whether this is happening.”

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