IMF getting ready to opt out of the Greek program

IMF getting ready to opt out of the Greek program

Besides some small steps of progress by Berlin, the meeting of the Washington Group and the session of the Euro Working Group ended on Thursday in Paris without any agreements on measures to ease Greece’s debt, heightening the possibility that the International Monetary Fund will opt out of funding the Greek program.

The progress recorded on Thursday in the French capital concerned the German side showing more flexibility, mainly regarding the extension of the repayment time for the loans of the second bailout. But sources say the IMF officials are preparing for the Fund’s exit from the Greek program as they say they cannot imagine how a deal can be reached so late in the program, ahead of its August 20 conclusion.

IMF spokesman Gerry Rice said on Thursday in Washington that negotiations are ongoing but he hastened to present the Fund’s future mode of engagement in Greece if it does not finance the Greek program after all. He said that the IMF “will participate in the post-bailout monitoring and the consultation process,” and will continue to monitor Greece through the procedures of Article IV so as to keep supporting the country.

In the context of Article IV, the IMF will also publish a report on Greece that will incorporate a Greek debt sustainability analysis.

Notably, IMF Managing Director Christine Lagarde will be in Berlin on Monday to meet with Chancellor Angela Merkel before participating in the June 21 Eurogroup.

“Discussions are continuing,” a eurozone official told Kathimerini, reiterating that for the Europeans it is clear the agreement will be reached at the June 21 Eurogroup and no earlier. However, this date is outside the time frame of the IMF, which had stressed that the debt-easing measures would have to be taken by end-May or early June at the latest.

On Thursday Rice said that “time is running very short” and added that the meetings in Paris also involved the head of the IMF’s European program, Poul Thomsen, and the Fund’s mission chief to Athens, Peter Dolman.

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