By Tom Ellis

The prospect of a fragmentation of Greek political forces and the gains of extremist opponents of the terms of Greece’s bailout by international creditors (the so-called “Memorandum”) in opinion polls in view of the May 6 elections, is reported to be causing concern to the International Monetary Fund (IMF) regarding the unhindered implementation of the Greek recovery program.

“The uncertainty is particularly heightened, not just regarding the short-term but, I would say, certainly much beyond the elections,” said Poul Thomsen, head of the IMF’s mission to Greece, commenting on the considerable fall in the nominal value of new Greek bonds following the haircut of the country’s debt earlier this year.

Speaking during the recent spring session of the organization, Thomsen argued that for Greece’s current efforts to bear fruit “there must be a significant restart of structural reforms, relative to what we have seen so far.”

“The pace of reforms we saw in 2011 leads to failure rather than success,” he noted.

Generally, IMF officials avoid public statements regarding Greek political developments, as they do not wish them to be possibly interpreted as “interventions.” In private, however, they appear strongly concerned about the danger of the lack of a strong government and its adverse repercussions on the Greek economy, when there is little room for missing the targets set.

IMF chief Christine Lagarde and Thomsen are said to have made it clear to Greek quarters that they view the formation of a broad coalition, both at political and social levels, as indispensible for the success of the program.

“The restructuring of the Greek political scene, in the sense that the two main parties have cooperated in supporting the program, is a major change in relation to the past. There is no doubt that the elections will test popular support for the program. It is, nevertheless, a very important change and we hope that, through it, Greece will reach the point where we shall have a significant restart of structural reforms,” Thomsen said recently.

In private discussions, other IMF circles privately argue in favor of parties that accept the necessity of the Memorandum -- including former Foreign Minister Dora Bakoyannis’s Democratic Alliance and Stefanos Manos’s Drasi -- joining forces. Drasi candidate Miranda Xafa, a former Greek representative to the IMF, attended the IMF’s spring session of the fund a few days ago.

The IMF officials ascribe particular significance to the evaluation of the situation by the markets.

“There is, evidently, some concern between investors as to whether Greece can make it,” Thomsen said. He argues that if we have a few years of steady progress and implementation of reforms, investors will be convinced and bond values will recover.