To stay on, IMF wants re­forms

Ber­lin re­jects re­port it is plan­ning for a new pro­gram with the ESM fill­ing the gap if the Fund de­parts

Kathimerini English - - Focus - BY ELENI VARVITSIOTIS

BRUS­SELS – The In­ter­na­tional Mone­tary Fund will re­turn to ne­go­ti­ate the com­ple­tion of the sec­ond re­view and its par­tic­i­pa­tion in the pro­gram once it sees the Greek gov­ern­ment leg­is­late at least some of the mea­sures viewed as nec­es­sary, such as the so­cial se­cu­rity re­form and re­duc­ing the tax-free thresh­old, a se­nior eu­ro­zone of­fi­cial has told Kathimeri- ni. At the same time, Ber­lin has re­futed a re­port that it is mak­ing plans to con­tinue the Greek pro­gram without the IMF.

Ahead of next Thurs­day’s Eurogroup meet­ing, Greece’s cred­i­tors will seek to find com­mon ground on their de­mands from Athens, and if the gov­ern­ment ac­cepts them the re­view might be com­pleted within Fe­bru­ary, which is the op­ti­mistic sce­nario.

But if there is no progress next month, with the Greek gov­ern­ment agree­ing to leg­is­late some of the mea­sures its cred­i­tors (and not just the IMF) will de­mand, then the re­view runs the risk of re­main­ing pend­ing for the com­ing months, up un­til May or even June, ac­cord­ing to the es­ti­mates of two eu­ro­zone of­fi­cials.

Ger­man tabloid Bild re­ported yes­ter­day that the coun­try’s fi­nance min­is­ter, Wolf­gang Schaeu­ble, is pre­par­ing to con­tinue the Greek pro­gram without the Fund’s in­volve­ment by bring­ing to the Ger­man par­lia­ment an amended Greek pro­gram, with the gap left by the IMF cov­ered by the Euro­pean Sta­bil­ity Mech­a­nism.

A few hours later a Ger­man Fi­nance Min­istry spokes­woman re­jected the re­port, say­ing that Ger­many ex­pects the IMF to par­tic­i­pate in the Greek pro­gram.

Of­fi­cials in Brus­sels say that an IMF de­par­ture would be a very neg- 1.0679 ative de­vel­op­ment, with one eu­ro­zone of­fi­cial ex­plain­ing to Kathimerini that without the IMF, a new pro­gram will be needed, and that that will have to take place af­ter the Ger­man elec­tions in Septem­ber and the for­ma­tion of the new gov­ern­ment in Ber­lin – i.e. “by the end of the year” – when the Greek side will no longer need a new pro­gram as Athens’s ma­jor obli­ga­tion this year is in July (amount­ing to about 7 bil­lion eu­ros), the of­fi­cial re­minded.

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