ESM Chief Confident of IMF Participation in Greek Bailout

klaus-reglingEuropean Stability Mechanism Chief Klaus Regling appears optimistic that the International Monetary Fund will jump on board the Greek bailout program.

During an interview with German newspaper Frankfurt Allgemeine Zeitung, Regling noted that the IMF should join in the program and it would be useful because of its technical and economic knowledge. Regling also noted that a deal that would satisfy the fund could be made.

The IMF’s decision will be announced following the first review of the three year 86 billion euro Greek bailout, expected to begin in mid-January. The fund’s hesitation to join from the beginning has been grounded in the twofold demand of debt relief for Greece and the implementation of the bailout agreement’s by the Greek government.

While European creditors have repeatedly ejected the possibility of an outright debt haircut, Regling noted, as he had done in the past, that other forms of debt relief such as lower interest rates with longer maturities as well as delaying payments are possible.

Regling also pointed out that Greece is currently keeping its word as far as bailout reforms go.

“The prime minister Alexis Tsipras is following the deal at this moment, this week all the necessary reforms for the running year went through the parliament. But of course I cannot guarantee that this will always be so,” he said.

While the Greek bailout’s first phase is close to conclusion and will be followed by the review, the timeline has already been pushed back with the initial intention having been to have concluded the review by the end of 2015.

Regling claimed that even though sometimes reforms in Greece get delayed this is not a sign of government’s stance to reject the reforms, but rather demonstrates the government’s problem of dealing with the implementation of these difficult reforms. He supported that the Greek government is willing to make these reforms.