Hopes for debt deal low amid EU-IMF discord

Hopes for debt deal low amid EU-IMF discord

Hopes for a breakthrough on the issue of Greek debt relief at a summit of eurozone finance ministers in Sofia on Friday are muted following a lack of progress in talks between European officials and representatives of the International Monetary Fund in Washington over the weekend. 

Talks involved all of the key players in the debate on Greece’s debt, including IMF chief Christine Lagarde, European Monetary and Economic Affairs Commissioner Pierre Moscovci, and the finance ministers of Germany, Italy, Spain and France. 

But a long-standing rift between EU and IMF officials over how a debt relief mechanism should operate continued, with the Fund representatives insisting that it should be automatic and the Europeans saying it should be tied to conditions. 

In view of the resistance put up chiefly by Germany, the EU’s largest economy, Finance Minister Euclid Tsakalotos expressed his concern that the debt relief being considered for Greece would be inadequate. 

Another worry is over creditors’ objections to a growth plan proposed by Greece. European officials responded with a 30-page memo to Greece’s 85-page proposal, requesting more detail and a stricter time frame. 

The growth plan was one of the issues discussed by leftist SYRIZA’s political secretariat during a session chaired by Prime Minister Alexis Tsipras on Saturday.

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