The International Monetary Fund (IMF) will most likely not join in the Greek bailout program bearing in mind its disagreement with EU resistance to debt relief. Senior sources within the IMF, however, point to a strong possibility of the fund playing a special advisory role with limited powers.
The IMF’s refusal to join in the Greek bailout is due to a deadlock following German Finance Minister Wolfgang Schaeuble’s refusal to keep the EU’s pledge for big debt restructuring once Greece pushed through on reforms. As a result the IMF considers Greek targets unrealistic.
Sources in the IMF say that its new role will be one of advisor but without strict conditionality, like compliance and economic health checks every three months. The exact nature of the new role being created especially for the IMF has yet to be decided. It is clear that it will have more powers than that of a simple advisor. “They won’t put money into the program but it won’t be just technical assistance; they will probably take a special advisory role to be created especially for the Greek bailout,” said an IMF source.
The new role will allow both sides to save face as IMF Chief Christine Lagarde will be able to have the fund on board without appearing to violate its rules and Schaeuble will be able to tell Germans that he has the IMF on board ahead of the German elections next fall.
Greek officials are in favor of the IMF being on board as it is a body that supports debt restructuring.