Geithner Blocked IMF Deal to Haircut Irish Debt

05-07-2011 • NakedCapitalism.com/

Was the US Treasury Secretary’s deep sixing of a plan by the seldom-charitable IMF to give the Irish some debt relief Versailles redux? By that I mean the Treaty of Versailles, the agreement at the end of World War I devised by the victors to dismember the German economy. Bear with me as I tease out this conceit. When most people think of the punitive deal, which most see as the cause of economic and social dislocation in Germany that fueled the rise of the Nazis, they focus on the unrealistic reparation payments without looking at the specific provisions intended to strip Germany of assets and productive capacity. As John Maynard Kenyes, a member of the British Treasury department who quit the negotiations in disgust to write The Economic Consequences of the Peace, the treaty seized, along with coal-rich Alsace Lorriane, but any assets held by German nationals in these territories were expropriated. In addition: The Allies ‘reserve the right to retain and liquidate all property, rights and interests belonging at the date of the coming into force of the present treaty to German nationals, or companies controlled by them, within their territories, colonies,possessions and protectorates, including territories ceded to them by the present treaty.