IMF Will Not Participate in Greece’s Bailout Until Autumn



TSIPRAS-BOULH04-06JUNE2015The International Monetary Fund is in favor of the idea of participating in Greece’s bailout, however the decision will be taken in the autumn, says a Reuters report.

The report cites Sweden’s representative to the IMF executive board. The fund has participated in Greece’s first two bailout programs, in 2010 and 2012, and is now involved fully in the talks between the debt-stricken country and its lenders. However its board is expressing doubts whether the Greek leftist government is committed to fully implement the reforms required for a third loan and economic recovery.

According to Thomas Ostros, who is a replacement director on the IMF’s 24-member board, the fund supports being part of the new bailout program, “but it will take time,” he said in an interview in Thursday’s Dagens Nyheter, a Swedish newspaper.

“There is going to be a discussion during the summer and autumn and then the board will make a decision during the autumn,” he said.

There are serious disagreements within Greece’s SYRIZA-ANEL coalition government over the austerity of required reforms. Prime Minister Alexis Tsipras is giving a battle with the extreme leftists of his party who urge him to stop negotiations and pull out of the Eurozone.

So far, close to 40 SYRIZA lawmakers voted against the reform bills required before the deal is signed. In September, there will be an emergency SYRIZA congress that will determine the future of the party and, consequently, the government. The prime minister and several cabinet members talk about the possibility of snap elections in the autumn.

It is possible that the IMF is waiting to see the political developments in the autumn in order to decide whether to participate in a new loan to Greece.

“It can not be something that is forced on them. Greece must own the problem. The Greek government is not there yet,” Ostros said, according to Reuters.

“…They have an inefficient public sector, corruption is a relatively big problem and the pension system is more expensive than other countries,” he added.


2 COMMENTS

  1. Apparently the EU oligarchs have agreed to a partial debt write-off, fearing the IMF may pull the plug if that wasn’t included in the discussions. IMF has argued for some time now, that a debt write-off – as much as 55% – is needed if there is ever going to be any possibility for the Greek nation to come back from the brink of bankruptcy…

  2. Wow. Mr. Ostros pulled no punches about Greek gov’t inefficiency, corruption, and overspending and the fact that Greece and Greeks must own the problems and embrace the solutions … that genuine reforms (not austerity) can only work if Greeks accept them. There are rational voices in Greece that should be heeded but precious few among the country’s politicians who almost universally are in the vote buying biz, using the public trough to pay for them.

    It is said we often get the gov’t we deserve:

    Ineptocracy – a system of government where the least capable to lead are elected by the least capable of producing and where the members of society least likely to sustain themselves or even try are rewarded, in exchange for their votes, with goods and services paid for by the confiscated wealth of a diminishing number of producers.

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