IMF warms to idea of entering program even without financing it

IMF warms to idea of entering program even without financing it

The International Monetary Fund has not ruled out its participation in the Greek bailout program, even if that means not funding it, at least until the issue of the Greek debt has been resolved.

That was a proposal which according to the minutes of Monday’s Eurogroup was tabled by the group’s president, Jeroen Dijsselbloem, and adopted by the head of the IMF’s European program, Poul Thomsen. Greek Finance Minister Euclid Tsakalotos disagreed, saying it would lead to a political crisis in Greece.

“This is an interesting proposal,” Thomsen responded to the Dutch finance minister’s idea, adding that he would bring it up at the Fund’s Executive Board meeting. The proposal, which had obviously been discussed previously behind the scenes, has not been rejected and is a possible scenario ahead of the next Eurogroup meeting on June 15.

This possibility was reiterated on Thursday by IMF spokesman Gerry Rice, who told a press conference that “there have been in the past some other cases of participation approval without funding,” although he did add that the IMF’s position is in favor of securing the sustainability of the Greek debt.

Rice noted that at this stage all alternatives regarding the debt are being examined and an agreement has yet to be reached. He said however that the Fund “is flexible” and stressed the differences with the eurozone are narrowing and “everyone hopes that until the Eurogroup an agreement can be reached.”

Tsakalotos rejected the proposal but did not rule out its acceptance in the future. He did show he was personally in agreement with the conclusions on the debt, but indicated the IMF’s non-participation would be a problem. “Were I to sign this text, there would now be a political crisis in Greece and if that is going to happen I will need some time to think about it,” he said.

The minutes of Monday’s meeting, publicized on Thursday by, showed a strong disagreement between Thomsen and German Finance Minister Wolfgang Schaeuble. Neither draft set of conclusions on the table satisfied Thomsen, and Schaeuble expressed his annoyance.

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