Tuesday

17th Sep 2019

Doubts emerge on IMF participation in Greek bailout

  • IMF chief Christine Lagarde - Her institution is sceptical about a third bailout for Greece without debt relief (Photo: Consillium)

The IMF has indicated it will not take part in a third bailout for Greece unless a deal is reached on making Athens' debt sustainable, a move that underlines the difficulty of reaching an overall agreement by next month's deadline.

"The IMF can only support a programme that is comprehensive," an IMF official told journalists on Wednesday reports Reuters.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

The official also said there was "no expectation" that talks over the coming weeks will reach the stage that allow the IMF to approve a new programme.

Meanwhile the FT reported that an IMF board meeting on Wednesday concluded Athens' high debt and poor level of implementing reforms means it is not eligible for a loan.

The conclusion means that while the Washington-based Fund will take part in bailout negotiations - which started earlier this week in Athens - it will potentially not decide whether to agree to the programme for several months.

A summary of Wednesday's board meeting, seen by the FT, says the IMF will only take part once eurozone lenders have "agreed on debt relief".

Greece and its creditors have just three weeks to reach a deal on the terms and conditions of an €86bn bailout after a preliminary go-ahead for a third loan was agreed at a fractious summit earlier this month.

The enforced deadline is 20 August when Greece is due to pay €3.2bn to the European Central Bank (ECB). If no deal is reached by then, Greece might have to seek a second bridge-loan to make the payment. That would follow a €7bn bridge-loan the country already had to take earlier in July to pay debts to the ECB and IMF.

The IMF's reluctance over Greece emphasizes the difficulty of the eurozone situation.

Germany, as Greece's largest eurozone creditor, is strongly opposed to writing down Greece's debt. It has also indicated that it would be difficult to get parliamentary approval for any final deal if the IMF is not onboard.

Meanwhile if Germany is sceptical that Greece will follow through on all the conditions necessary just to open bailout talks and the raft of measures that will be attached to the actual bailout, the Greek government is just as sceptical about having to push through more austerity measures.

Greek PM Alexis Tsipras, following the July Summit, admitted he signed a deal that he did not believe in. Since then he has been struggling to contain the discontent in his left-wing Syriza party.

In a defiant address on Wednesday, he told the party: “Leaving the euro without any possibility of economic support, and without foreign exchange reserves, would mean a huge devaluation, harsh austerity and further recourse to the International Monetary Fund for support."

“Anyone who doesn’t accept this is either wilfully blind or is hiding the truth," he added.

Earlier he had mooted an internal party referendum on Sunday but this was rejected by the committee on grounds that it would derail bailout talks.

The party's committee eventually decided to hold a congress in September to determine government policy - a move that could then lead to snap elections in the country.

Greece embroiled in bailout row with IMF

The Greek government accuses the International Monetary Fund of wanting to push the country to the brink of default after WikiLeaks revelations. The IMF rejects "threats".

News in Brief

  1. Germany prepared to top up post-Brexit EU budget
  2. New Saudi attack threats, but EU and US still divided
  3. EU anti-trust chief goes after Belgian tax breaks
  4. Luxembourg PM Bettel humiliates Johnson
  5. No new backstop proposal at Juncker-Johnson lunch
  6. Saudi oil production in flames after drone attack
  7. US: attack on Saudi oil came from Iran or Iraq
  8. Poll: Belgium's far-right Vlaams Belang largest party

Opinion

Why von der Leyen must put rights at core of business

Ursula von der Leyen's in-tray must include those European executives on trial for systematic workplace harassment, the break-up of European slavery rings, and allegations of European companies' abuse in palm oil, including child labour, land grabs, and deforestation.

Stakeholders' Highlights

  1. Nordic Council of MinistersNew programme studies infectious diseases and antibiotic resistance
  2. UNESDAUNESDA reduces added sugars 11.9% between 2015-2017
  3. International Partnership for Human RightsEU-Uzbekistan Human Rights Dialogue: EU to raise key fundamental rights issues
  4. Nordic Council of MinistersNo evidence that social media are harmful to young people
  5. Nordic Council of MinistersCanada to host the joint Nordic cultural initiative 2021
  6. Vote for the EU Sutainable Energy AwardsCast your vote for your favourite EUSEW Award finalist. You choose the winner of 2019 Citizen’s Award.
  7. Nordic Council of MinistersEducation gets refugees into work
  8. Counter BalanceSign the petition to help reform the EU’s Bank
  9. UNICEFChild rights organisations encourage candidates for EU elections to become Child Rights Champions
  10. UNESDAUNESDA Outlines 2019-2024 Aspirations: Sustainability, Responsibility, Competitiveness
  11. Counter BalanceRecord citizens’ input to EU bank’s consultation calls on EIB to abandon fossil fuels
  12. International Partnership for Human RightsAnnual EU-Turkmenistan Human Rights Dialogue takes place in Ashgabat

Latest News

  1. EU must give full support to Ukraine to dissuade Kremlin
  2. EU divided on how to protect rule of law
  3. Nordic region to become world's most sustainable and integrated
  4. In detail: Belgium's EU nominee faces crime probe
  5. France urges EU virtual currency rules amid Libra risk
  6. Brexit and new commission in focus This WEEK
  7. As recession looms, Europe needs more spending
  8. How should the EU handle Russia now?

Join EUobserver

Support quality EU news

Join us