IMF demands debt relief as price for involvement in Greek bail-out

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Is this the sick joke of the Century?

Athens accepts fund will have a role in its new rescue deal but lender continues to call for substantial debt relief

The IMF remains cool over the prospect of providing more financial aid to Greece

Greece has backed down over having the International Monetary Fund involved its new bail-out deal, after months of tension between Athens and its senior creditor.

Greek finance minister Euclid Tsakalotos said his government was now committed to keeping the IMF on board, after his prime minister had attacked the institution for its “unconstructive” attitude during bail-out negotiations.

“The involvement of the IMF is agreed,” Mr Tsakalotos told Germany’sHandelsblatt. “This is our commitment.”

nternational Monetary Fund (IMF) Managing Director Christine Lagarde (L) and Greek Finance Minister Euclid Tsakalotos talk at the start of a special Eurogroup finance ministers meeting International Monetary Fund (IMF) Managing Director Christine Lagarde (L) and Greek Finance Minister Euclid Tsakalotos   Photo: EPA

 

The concession came as eurozone finance ministers met in Brussels to discuss the government’s progress on implementing vital pensions reforms.

But the IMF remained cool over the prospect of providing more financial aid to Greece, insisting its support was still conditional on the EU granting Greece substantial debt relief.

“In addition to a comprehensive policy package, Greece also requires debt relief from European partners,” said IMF spokesman Gerry Rice on Thursday.

Reforms and debt relief were both “critical components” to secure IMF support, said Mr Rice. “The conclusion of discussions with us will depend on progress on both of these fronts,” he said.

Greek prime minister Alexis Tsipras had called for the IMF to stay out of the country’s bail-out last month.

But European creditors, led by Germany, have insisted on the IMF’s technical and financial support in a three-year rescue deal, agreed last August.

Mr Tsakalotos said the lender would now have an “active involvement” in the country’s financial future.

Athens has grown frustrated with the IMF’s insistence on deep pensions cuts as its price for involvement in the new rescue package.

There is an agreement and that agreement is that the IMF remains involved
Jeroen Dijsselbloem

The IMF repeated this demand on Thursday, saying Greece’s pensions spending – which stands around 10pc of GDP – is “unsustainable” and would need to be slashed in order to meet its “ambitious fiscal targets”.

Pension reform has proven to be one of the most intractable issues between the two sides, with creditors demanding Greece cut its pensions bill by €1.8bn a year.

Creditors are still evaluating Athens’ draft reforms, which aim to reduce the bulk of the pensions outlay by increasing employer contributions, rather than slashing provisions.

The IMF said it would seek to play a “constructive” part in the Greek programme if EU creditors reduced the country’s debt burden, which stands at 200pc of GDP.

“The nature of the role will depend on the discussions with our partners and the Greeks in the coming days,” said Mr Rice.

Jeroen Dijsselbloem, head of the eurogroup of finance ministers, said Greece could not “backtrack” on the issue of IMF involvement as it was a key demand made by eurozone member states.

The IMF has held a “senior creditor” status during five years of Greek bail-outs meaning repayment of its loans stand above the EU.

“There is an agreement and that agreement is that the IMF remains involved. And that is respected by the Greek government.”

Blog Editor: The IMF Created this problem and now they are DEMANDING relief. The IMF and it’s related banking gangsters at the Fed intend to collapse the world economy, make themselves the few in control of 95% of the world’s wealth and power, and then do more evil to humanity than has ever been seen or imagined by most women and men. And now they are DEMANDING RELIEF which of course they can create out of thin air by simply making computer notation of more money.
Further, Athens and others who have gotten themselves into debts up to their eyes and are now drowning as they attempt to tread water, because they have been operating as socialists instead of productive Free Market HONEST Free Enterprise people, will have no way out of their problem regardless of what the IMF may or may not do. There is no way to stop this disaster from becoming what it finally will!
Everything is going as the evil one intended. The trap is closing around us, ever so gently.
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