Paulo Nogueira Batista, Brazil’s representative to the International Monetary Fund, who abstained from a vote granting more aid to Greece after he said the idea it could be paid back was “delusional,” was recalled by Finance Minister Guido Mantegna to explain himself but it was reported he won’t lose his position at the agency, where he is the delegate for 11 countries.
Batista didn’t consult his government on the vote after he said there is no chance Greece will be able to pay off its $325 billion in loans from the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) and apparently was in for a reprimand at least for saying so.
Mantegna ordered Batista to return home and discuss why he abstained without consulting Brazil’s government to be told how to vote, Mantega told reporters in Brasilia, adding the representative will keep his job. Mantega spoke with IMF Managing Director Christine Lagarde and said his country fully supports sending money to Greece and that Batista spoke without authorization from the government.
“It is most unfortunate that it happened in those circumstances but I am very pleased that the position of Brazil could be rectified and clarified at the highest level,” Lagarde told reporters in Washington. She said she wants the EU and ECB to take big losses on a Greek debt write-down but for the IMF to be exempt and keep making a profit off the loans.
The IMF’s board on July 29 approved the release of 1.72 billion euros ($2.27 billion) to Greece, three days after the nation obtained 2.5 billion euros from euro-area governments as part of their rescue package. One of the conditions for the IMF funds was carrying forward a plan to dismiss 4,200 state employees. Greece is being subjected to a “Draconian adjustment,” Batista wrote July 31 in a statement, referring to austerity measures he said are making the situation worse, not better.
“Given the negative effects of the policies imposed on Greece and its population, the program ends up bringing risks to the integrity of the IMF,” Batista wrote in the statement, speaking on his own behalf and not that of the 11 countries he represents. “It is important that the Fund prepare a new program for Greece, with better conditions, so as to allow the country to emerge from the crisis.”