The president of the United States has made clear he doesn’t think much of the European Union. Now, his Treasury secretary is making clear Americans won’t be footing the bill to save it.
Just days after scolding the International Monetary Fund for failing to see all of the anti-American currency manipulation keeping President Trump from MAGA, Mnuchin is offering the IMF some support of a kind. Support, that is, to not waste American dollars keeping Greece afloat, even if it winds up killing the EU. Here’s the situation: Greece is running out of money (again) because as it turns out austerity doesn’t actually produce the kind of economic growth that might make a bailout sustainable. In order to prevent the Greeks from defaulting and maybe blowing up the Eurozone, it needs another bailout. Our European “allies” would like the IMF to help out, as that would make such a bailout more palatable to their angry voters, many of whom will be visiting ballot boxes later this year. But the IMF can’t help out unless Greece’s creditors offer some serious debt relief—which is likely to make voters, particularly German voters, even angrier—or if the U.S. agrees to look the other way while the IMF fudges some numbers and ignores a couple of rules. And if Angela Merkel wants the latter, she’s going to have to start buying a lot more tanks.
“This is primarily a European issue,” Mr. Mnuchin said in a Wall Street Journal interview Wednesday....
The Trump team could offer the IMF cover as it faces escalating pressure from Germany to give Europe’s Greek bailout credibility with fresh financing. If Washington signals it won’t allow the IMF to tweak its numbers on Greece to make Europe’s bailout work—like it did in the first two programs—the fund will have backing from its most powerful shareholder to stand firm….
“His gut instinct is probably to get the U.S. out and not spend taxpayer money on a faraway place,” Mr. Kirkegaard said. “But he has something he wants from Europe, including Europeans spending more on defense.”