Negotiations with Greece are speeding up but there is still a long way before an agreement, said Poul Thomsen, Director of the European Department of the International Monetary Fund (IMF).
Thomsen said that Greece will probably run out of money by June and the consequences of a Grexit must not be underestimated.
The IMF official spoke to German business daily Handelsblatt underlining that there is progress in the negotiations between Greece and its international creditors in the past few days. This is a positive development, he said, but procedures should be expedited because there is still a long way to go before the two sides come to a timely agreement.
Thomsen said that Greece will have money until June but also has a lot of financial obligations to meet by then. He stressed the importance of a timely agreement so that creditors can disburse aid funds on time. It is estimated that Greece’s funding needs are 9-10 billion euros until June and the Greek government is forced to resort to internal borrowing to meet its needs.
The IMF official also warned Greece’s European partners that they should not take the possibility of a Grexit lightly.
“No one should assume that a country’s exit from the euro would not be accompanied by problems. It is important to reduce longer-term risks such as the risk to see the Eurozone as a place where you can come and go as you please. We must send a very strong political message that the Eurozone is integrating further to dissipate such risks,” Thomsen said.
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