What is not surprising is that he contrasted a "populist scenario" with a path of virtue.
In the populist scenario "the poorest would pay", (a strange attribute of populism, as if they didn't under the neo-liberal scenario!) with a return to the command economy, with less monetary discipline, printing (of money) - he could not articulate the loathsome phrase in full - controls on prices, trade and foreign exchange, and hyperinflation. All apparently logically connected with one another.
There could be no illusion that the IMF could support this quite apart from being basically bankrupt itself, whereas he had just been gratified to hear that the parliament of the Ukraine had become more reconciled to the government's reforms, and would definitely be getting something of the order of 2 billion $ (enough to restore Soros's fortunes for one day).
Scenario two however was called policies for stability with growth. Central would be the restoration of monetary discipline, with very tight control of liquidity support to banks.
[This seems to be consistent with another story circulating tonight that the decisive moment in the downfall of the rouble occurred early in August. The Russian Central Bank had supported with substantial transfers, a number of major private banks with interests in media groups which had given political support to Yeltsin in 1996. But instead of using this money to give out to domestic creditors, and to repay foreign debt, they dumped the roubles on the market to get dollars, thereby punching a hole in rouble stability that become irreparable. In the course of this, they made significant profits, remain viable and are likely to be key players in the deal currently being brokered. Most reprehensible and worthy of rebuke from Camdessus, but probably not enough to disqualify them from the game.]
So the "policies for stability and growth", continued with a reference also to the importance of further major "structural" reform, and an "extremely strong fiscal policy".
But then he threw the remark in nonchalantly with gallic elegance, "with or without a currency board, why not?" as the only element of choice in the whole package.
So currency boards are not anathema. Even in a week in which Hong Kong has thrown over 6% of its reserves into the stock market, to punish futures speculators, with its exchange even going up when all other stock exchanges were going down he allowed his name to be linked to the concept of currency boards.
While Camdessus was needing to appear strong and confident, from an olympian height, and to present a polarised view of the choices in reality in front of Russia in the form of a range of compromises between publically or less publically accountable monopolies, he was already signalling that the ground is shifting under his feet away from pure neo-liberalism.
Does anyone know how currency boards work, and how they differ from "free" national management of foreign exchange because I do not have detailed knowledge of this?
Chris Burford
London.