IMF Says ‘Progress’ with Greece, But Document Leaks ‘Default’ Scenario

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As Greece is running out of cash and the talks with its European and IMF creditors on additional financial aid have been deadlocked on the pretext that Greece has to implement substantial reforms, such as pension cuts, labor market liberalization, and public administration consolidation, the possibility of a Greek default in June is more evident than ever, according to a leaked document firstly presented by Channel 4 News.

In a text composed on May 14th, the IMF staff say that the forthcoming Euro summit in Riga seems to be the last chance for a deal to be succeeded among Greece and its lenders before the country technically defaults on a payment to the IMF in early June: “There will be no possibility for the Greek authorities to repay the whole amount unless an agreement is reached with international partners”.

The aforementioned statement reflects the IMF’s ascertainment that the Greek economy is falling back into recession and the €1.5bn payment that should be delivered by Greek government in June is a possibility far from reality.

However, the memo confirms the fact that Greece and its creditors have reached “some recent progress” on the VAT reform, tax collection and regulations during the negotiations.

You can read the leaked IMF document below:

IMF Leaked document, part 1IMF Leaked document, part 2