Perhaps because of the increasingly vocal calls of Republican House Members for rescinding the extra $100 billion voted the International Monetary Fund at President Obama???s urging in 2009, the IMF announced recently it would not participate in the $125 billion eurozone bailout of Spain.
The leader of the movement on Capitol Hill to rescind the $100 billion and have greater scrutiny of the IMF could not be more pleased. In a letter Friday June 29 to IMF Managing Director Christine LaGarde, Rep. Cathy McMorris Rodgers (R-Wash.) conveyed strong thanks to her for withholding IMF funds ???and thereby U.S. tax dollars in the recent eurozone bailout of Spain.???
McMorris Rodgers, vice chairman of the House Republican Conference and liaison to the House for presumptive Republican presidential nominee Mitt Romney, wrote LaGarde of her concern that Spain, the world???s 12th largest economy, is getting a $125 billion bailout from sister eurozone nations ???without the condition that it make the tough decisions to reduce spending and borrowing.???
Noting that ???last year, only four of the 27 EU nations cut government spending??? and that Greece — the beneficiary of a bailout package from the IMF, the European Central Bank, and the European Union — ???cut a mere six percent of its budget and continues to run a deficit worth 10 percent of its economy,??? McMorris Rodgers also pointed to the national debt in Italy, Spain, and France, which ???continues to increase.??? She took a not-so-subtle whack at France???s recently-elected Socialist President Francois Hollande, whose government ???has actually lowered the retirement age from 62 to 60, adding untold billions to the nation???s liabilities. Given the IMF???s tremendous financial commitment to the EU, all of these countries should be cutting spending and balancing their budgets.???
The IMF decision to withhold funding from the bailout to save teetering banks in Spain came, interestingly, as German Chancellor Angela Merkel softened her staunch commitment to austerity and spending to give Spain’s Prime Minister Mariano Rajoy the ???no strings attached??? bailout he was desperately seeking.
McMorris Rodgers, the author of the legislation to rescind the Obama-encouraged extra $100 billion to the U.S.???s IMF commitment, wrote LaGarde that her organization???s decision ???reinforces my belief that you are taking the IMF in a better direction.???