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Germany says expects IMF to participate in Greece’s bailout

TAGS: Economy, EU, Politics

Germany believes the International Monetary Fund will participate in Greece’s bailout and it is too early to start thinking about other arrangements should the IMF bow out, a spokesman for the German finance ministry said on Monday.

The IMF said around two years ago that it would take part in Greece's aid package, the spokesman said at a regular government news conference, and added: “Nothing has changed about that and it's much too early to think about 'what if’.”

He was answering a question about a report in the Bild newspaper that said Finance Minister Wolfgang Schaeuble would argue for a Greek exit from the eurozone should the IMF withdraw from the third bailout program.

Bild said it had obtained the information from sources in the ruling conservatives, which include Chancellor Angela Merkel's Christian Democrats and their Bavaria-based allies, the Christian Social Union.

The finance ministry spokesman said IMF involvement was a prerequisite for the third bailout program.

Talks on labor reforms and fiscal issues between Greece and its official creditors – the European Stability Mechanism (ESM), the European Commission, the European Central Bank and the IMF – have dragged on for months, rekindling fears of a new crisis.

Greece has said it would welcome an IMF exit, because that might help it conclude a crucial review of its progress without adopting more austerity.

Schaeuble this month floated the idea of a new Greek bailout program without the IMF, saying the Europeans would have to enforce better conditions of any new bailout. This task would be handed to the eurozone's bailout fund ESM, he added.

The IMF, which joined Greece's first international bailout in 2010, when the debt crisis broke, has yet to decide whether it will fund its third bailout program.

Schaeuble has repeatedly argued that Greece would recover faster and regain competitiveness more quickly if it left the eurozone and reinstated the drachma, its former national currency.

[Reuters]

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