IMF ‘won’t join Greek bailout before reforms’
The International Monetary Fund (IMF) cannot participate in another Greek bailout until Greece and its creditors make difficult decisions on economic reforms and debt relief, a fund official said Thursday.
Briefing reporters on condition of anonymity, the official said Greece needs to commit to reforms and creditors must provide debt relief — extending loan terms or reducing the debt outright — that will allow Greece to pay its bills over time. “It’s always been clear the IMF will only come in once these conditions are in place,” he said, suggesting that point is months away.
Still, the fund is participating in ongoing debt talks.
In Athens, a government official refused to comment directly on the IMF’s participation in the third bailout.
“The IMF’s position on debt sustainability is not new. ( IMF managing director Christine) Lagarde has referred to this dozens of times,” the official said, asking not to be identified because the talks are ongoing.
The IMF has said Greece’s debts are likely to rise to 200 percent of its economic output in the next two years, a burden the fund calls unsustainable.
Greek Bailout Talks Shift into Higher Gear
Greece’s talks with its international creditors on a third bailout worth 85 billion euros (US$93 billion) shifted into a higher gear on Friday, with lead negotiators from the European Union and International Monetary Fund meeting key ministers in Athens.
The talks with Finance Minister Euclid Tsakalotos and Economy Minister Giorgos Stathakis follow preparatory meetings in the Greek capital this week between lower-level officials on reforming the tax system and labor market regulations.
The third bailout will include a new punishing round of aus- terity measures heaped on a country reeling from a six-year recession and more than 25 percent unemployment. Prime Minister Alexis Tsipras has pledged to back the new cutbacks, while openly admitting that he disagrees with them.
“We will implement them, yes, because we are forced to,” he said in parliament Friday. “But at the same time we will struggle to change them, to improve them and to counter their negative consequences.”
The bailout talks with the IMF, European Commission, European Central Bank and European Stability Mechanism must be concluded before Aug. 20. That’s when a debt repayment to the ECB worth more than 3 billion euros is due — money which Greece does not have.
Friday’s meetings came hours after Tsipras defeated a bid by dissenters in his left-wing Syriza party to push for an end to bailout negotiations and seek a return to the old national currency, the drachma.
The party’s governing central committee backed a proposal by Tsipras to hold an emergency party conference in September, after the talks have been concluded.
Dissenters had sought a conference earlier, pressing the government to abandon the negotiations.
Tsipras effectively lost his majority in parliament in a vote three weeks ago, when nearly one-fourth of Syriza’s lawmakers refused to back new austerity measures, arguing that the party has betrayed the antiausterity platform that got it elected in January.
“This country no long has democracy, but a peculiar type of totalitarianism — a dictatorship of the euro,” prominent dissenter Panagiotis Lafazanis said.
Pro-European Union opposition parties were left to save the bill and have continued to prop up his government, while Tsipras has taken no disciplinary action against dissenters.