To stay on in Greek program, IMF wants gov’t to pass reforms


The International Monetary Fund will return to negotiate the completion of the second review and its participation in the program once it sees the Greek government legislate at least some of the measures viewed as necessary, such as the social security reform and reducing the tax-free threshold, a senior eurozone official has told Kathimerini. At the same time, Berlin has refuted a report that it is making plans to continue the Greek program without the IMF.

Ahead of next Thursday’s Eurogroup meeting, Greece’s creditors will seek to find common ground on their demands from Athens, and if the government accepts them the review might be completed within February, which is the optimistic scenario.

But if there is no progress next month, with the Greek government agreeing to legislate some of the measures its creditors (and not just the IMF) will demand, then the review runs the risk of remaining pending for the coming months, up until May or even June, according to the estimates of two eurozone officials.

German tabloid Bild reported on Wednesday that the country’s finance minister, Wolfgang Schaeuble, is preparing to continue the Greek program without the Fund’s involvement by bringing to the German parliament an amended Greek program, with the gap left by the IMF covered by the European Stability Mechanism.

A few hours later a German Finance Ministry spokeswoman rejected the report, saying that Germany expects the IMF to participate in the Greek program.

Officials in Brussels say that an IMF departure would be a very negative development, with one eurozone official explaining to Kathimerini that without the IMF, a new program will be needed, and that that will have to take place after the German elections in September and the formation of the new government in Berlin – i.e. “by the end of the year” – when the Greek side will no longer need a new program as Athens’s major obligation this year is in July (amounting to about 7 billion euros), the official reminded.