Committee for the Abolition of Illegitimate Debt

This time, the former IMF IMF
International Monetary Fund Along with the World Bank, the IMF was founded on the day the Bretton Woods Agreements were signed. Its first mission was to support the new system of standard exchange rates.

When the Bretton Wood fixed rates system came to an end in 1971, the main function of the IMF became that of being both policeman and fireman for global capital: it acts as policeman when it enforces its Structural Adjustment Policies and as fireman when it steps in to help out governments in risk of defaulting on debt repayments.

As for the World Bank, a weighted voting system operates: depending on the amount paid as contribution by each member state. 85% of the votes is required to modify the IMF Charter (which means that the USA with 17,68% % of the votes has a de facto veto on any change).

The institution is dominated by five countries: the United States (16,74%), Japan (6,23%), Germany (5,81%), France (4,29%) and the UK (4,29%).
The other 183 member countries are divided into groups led by one country. The most important one (6,57% of the votes) is led by Belgium. The least important group of countries (1,55% of the votes) is led by Gabon and brings together African countries.

http://imf.org Director (2004-2007), vice-President and Spanish Minister of the economy in José Maria Aznar’s (1996-2004) conservative government, should really serve the sentence. The Spanish Supreme Court has just condemned him, on 3 October 2018, to four and a half years of detention for misappropriation of funds belonging to the banks he managed. The judges found that when Mr. Rato took over the direction of “Caja Madrid” from his predecessor, Miquel Blesa, the bank had an irregular credit card system that was maintained and developed. Sixty-three senior executives and administrators of the bank, which has since been renamed “Bankia” calmly misappropriated, between 2003-2012, more than €12 million, of which €2.6 million was during Mr. Rato’s term of management (2010-2012). Spanish public opinion has been profoundly scandalised as at the same time the country was hit by the effects of the 2008 crisis and the bursting of a speculative property bubble Property bubble A property bubble is a speculative bubble on the entire property market. It is characterized by a sharp rise in the prices of real estate; this entails a significant and persistent gap between the price of property and the variation of fundamental economic determinants such as salaries and rental value. ... events for which the banks held a large part of the responsibility.

The 63 accused of taking advantage of this criminal system were all sentenced to between 3 months and the 6 years maximum sentence which was handed to the former President of Caja Madrid, Miquel Blesa, found guilty of creating the system. He committed suicide in July 2017. Fourteen of the convicted, who received sentences of more than two years should normally serve their sentences in prison. It is deplorable that many of the others may have their sentences suspended.

Prison, a tool of the Capitalist system, is not full justice in this case. The culprits must have their nuisance value withdrawn. That is, heavy fines that are on a scale with the damage they have done should be applied to their personal fortunes and their right to practice banking activities should be withdrawn, including holding posts in International Financial Institutions. The CADTM condemns the class justice and finds intolerable that these people enjoy privileges and special considerations in the application of their sentences.

Legal procedures continue

On 26 November, after five years of enquiry, Rodrigo Rato, must once again go into the box, now accused of fraud. He is also accused of having falsified “Bankia’s” accounts in order to get the authorization from the ruling body to have the bank listed on the Spanish stock exchange. This introduction, pompously celebrated in July 2011, was catastrophic. The share Share A unit of ownership interest in a corporation or financial asset, representing one part of the total capital stock. Its owner (a shareholder) is entitled to receive an equal distribution of any profits distributed (a dividend) and to attend shareholder meetings. value plummeted by 80% within a year. The Spanish State was forced to nationalize “Bankia” and recapitalize through a European loan of €22.4 billion.

Finally, after €6.5 million of unknown origin were discovered on the books of the company “Kradonara” ran by Mr. Rato, the “brain” behind the “miraculous recovery of the Spanish economy” at the time when he was minister is charged with money laundering and corruption.

The CADTM praises the public pressure applied through the 15MpaRato campaign that led to the condemning of Rodrigo Rato and demands that the full sentence be served without mitigation. It is despairing to see that certain high level persons, such as the former financial director of Caja Madrid, Ildefonso Sánchez Barcoj, have their sentences reduced and so avoid actually spending time in prison, as happens to many of the popular classes whose crimes had no impact on the lives of others. The CADTM denounces the two-tier justice system that protects the major culprits of the unending financial crisis.

Since the beginning of the crisis largely caused by the irresponsible voraciousness of our bankers in the US and in Europe, and apart from exceptional cases in Iceland, bankers have not been punished by prison and neither has any bank had its licence withdrawn. Having only been fined they continue in comfortable impunity to ply their nefarious activities, unconcerned about provoking a new crisis.

After the forced resignation of former IMF CEO Dominique Strauss-Kahn, in May 2011 accused of attempted rape, and the legal procedures against the current CEO, Christine Lagarde, found guilty but not sentenced in 2016, [1] it is the turn of Rodrigo Rato to be accused. The CADTM observes that the top management of the IMF is regularly indicted whilst the Washington organisation continues to issue “recommendations” to its member countries. The fact that a former director of a major bank and of the IMF is sentenced for embezzlement and is accused of fraud, is a revealing indication that should encourage us to call for the abolition of the IMF and their death dealing policies, as well as citizens’ control of the financial sector.

Press release published on the blog Un monde sans dette of the monthly economics review Politis (in French).