European Union’s ‘Grexit’ fears still bubbling

German Chancellor Angela Merkel will meet the chiefs of two of the institutions auditing Greece’s bailout this week as questions over the International Monetary Fund’s involvement in aiding the cash-strapped country come to the fore.

Merkel will host IMF managing director Christine Lagarde and European Commission president Jean-Claude Juncker in separate meetings at the Chancellery on Wednesday, Ulrike Demmer, a government spokesperson, told reporters in Berlin on Friday.

The government still insists on the IMF making a financial contribution to Greece’s bailout, finance ministry spokesperson Friederike von Tiesenhausen said at the same press conference. The fund will contribute as much as €5 billion (about R69 billion) to the country’s third rescue package, German magazine Der Spiegel reported on Friday, without saying where it obtained the information.

“We have said over and over again that for us the IMF’s participation is indispensable and we are working on this path,” Tiesenhausen said. “We have already said this week – there are also comments from Brussels on this – that there is convergence between the institutions.” Merkel, who faces a federal election in September and has fallen behind her Social Democrat challenger Martin Schulz in some opinion polls, needs the IMF on board to make good on a promise to her Christian Democrat-led caucus that the fund will play its role in overseeing Greek compliance with the conditions laid down in the programme. – Bloomberg

Picture: Bloomberg ON THE JOB. As France and Germany try to find ways to fix Greece’s continuing debt problems, Athens is fighting the IMF in an attempt to keep its hands off pensioners’ savings and bank accounts.