IMF blocks aid to farmers: "Governments will regret what they promised"

IMF blocks assistance to farmers, claiming that “governments will regret their promises” and should instead proceed to “necessary” fiscal stabilization.

This position was expressed Managing Director of the International Monetary Fund Kristalina Georgievawho stated that understands the difficulties of farmers who have been demonstrating for several days in European countries, especially in France, Belgium and Germany. Speaking to the media, she assured that “understands from a human point of view” that farmers”face many difficulties” and “it is not easy to do the work they do”.

But if the availability of help “puts governments’ backs against the wall and prevents them from doing what is necessary to strengthen their economies, there is a risk that they may regret it”she added.

The IMF has been insisting for months that countries, especially the richest, must phase out the support measures they put in place to prop up their economies at the height of the pandemic and then cushion the inflation shock and the fallout from Russia’s invasion of Ukraine.

Kristalina Georgieva has repeatedly highlighted the risk that states will be forced to face economic turmoil without adequate fiscal space as borrowing rates have risen sharply in recent years. “I have spoken to some officials, especially finance ministers, who recognize the need for fiscal consolidation, but say it is very difficult to withdraw support.” – she said.

IMF recommends “Take a full look at how to get the flexibility you need. Can you increase your income? Can you ensure the quality of your spending? Is there anything else you can do?”

Governments “are under enormous pressure to invest in competitiveness, in the green economy, in training and talent in the digital economy, but where is all this money coming from? Debt servicing is rising. Your public support has increased for good reasons, and the pressure is on you so you can keep spending money” – she insists.

Farmer protests in France, Germany, Belgium and Greece have forced their governments to increase aid to farmers.

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