What of the IMF?

Kathimerini English - - Front Page - BY ALEXIS PA­PACHELAS

Whether Greece will make it through the Ber­muda Tri­an­gle (eval­u­a­tion, debt restruc­tur­ing and bank re­cap­i­tal­iza­tion) will de­pend not only on what hap­pens in Par­lia­ment and the ful­fill­ment of Greece’s com­mit­ments. There is, as there al­ways has been, the ele­phant in the room, which is the In­ter­na­tional Mon­e­tary Fund. Much de­pends on what it de­cides to do. The IMF has, in ef­fect, frozen the Greek pro­gram. Se­nior Fund of­fi­cials make clear that “the cur­rent pro­gram was agreed be­tween Athens and the Euro­peans, not by us.” Prac­ti­cally, this means that the IMF can ask for fur­ther cuts to pen­sions or even more fun­da­men­tal re­forms. Some – with their heads in the clouds, in my opin­ion – be­lieve that the Euro­peans will buy Greece’s debt to the IMF and so get it out of the way. In Ber­lin, how­ever, IMF par­tic­i­pa­tion in the Greek pro­gram is seen as an in­vi­o­lable con­di­tion for Ger­man fund­ing to con­tinue. Chan­cel­lor An­gel Merkel has been hurt po­lit­i­cally by the refugee cri­sis. Op­po­nents of the Greek pro­gram are the same ones who crit­i­cize her for her han­dling of the refugee is­sue. There is a clear dan­ger that she may try to sat­isfy them on one front. With­out the IMF’s par­tic­i­pa­tion it is dif­fi­cult to see Ger­man fund­ing con­tin­u­ing and any restruc­tur­ing of Greece’s debt. This brings us to the next ma­jor is­sue. What the IMF is ask­ing with re­spect to Greece’s debt is dif­fi­cult for the North­ern Euro­peans to swal­low. The Fund’s pro­pos­als on debt re­lief are con­sid­ered ex­ces­sive and it is cer­tain they will be re­jected. But the same ap­plies to its de­mands for the Greek pro­gram, which would not pass through any par­lia­ment. The gov­ern­ment – and the coun­try with it – is in dan­ger of be­ing crushed be­tween the Euro­peans and the IMF, which is ex­actly what hap­pened to An­to­nis Sa­ma­ras’s ad­min­is­tra­tion. Peo­ple in the know do not rule out the pos­si­bil­ity that the Fund’s lead­er­ship wants to dis­en­gage from the Greek pro­gram be­cause it does not be­lieve things will work out and wants to pre­vent fur­ther dam­age to the IMF’s stand­ing. If this is the case, it is pos­si­ble that the Amer­i­cans could push for the Fund to re­main on board. But events so far have in­di­cated that Washington has never been pre­pared to put its foot down within the IMF to sup­port any Greek gov­ern­ment. A Euro­pean of­fi­cial who has good knowl­edge of the Greek is­sue sug­gested the other day that he is hope­ful ev­ery­thing will go well be­tween Greece and the Euro­peans but that he could only be cer­tain once the IMF’s po­si­tion be­comes clear.

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