ANALYSIS

Dijsselbloem only cited the debt lightening issue to appease the IMF

dijsselbloem-only-cited-the-debt-lightening-issue-to-appease-the-imf

The issue of lightening the Greek debt remains a bone of contention between the eurozone and the International Monetary Fund. Eurogroup chief Jeroen Dijsselbloem brought it up on Monday in order to satisfy the Fund, so that the latter would return to the talks in Athens, but there is little more to read into that.

The IMF has made it clear that a further lightening the Greek debt is not an issue of prestige for the Fund but one of the two conditions to be fulfilled before it signs a new bailout deal with Athens – otherwise it sees no reason to keep supporting Greece. Bear in mind that Germany and a number of other eurozone states had set the Fund’s participation as a term for their agreeing to the third bailout package.

It was therefore part of a reconciliation strategy that Dijsselbloem called on his Eurogroup peers on Monday to be prepared to discuss the Greek debt next month. In fact, an exchange between the Dutch politician and European Commissioner for Economic and Financial Affairs Pierre Moscovici was quite telling: The microphones had been left on after the end of the press conference when Moscovici told Dijsselbloem, “I think you have generated a huge debate on the debt, on the lightening of the debt,” to which the Eurogroup chief replied, “I did that on purpose.”

Apparently eurozone ministers are ready for that debate: French Finance Minister Michel Sapin said talks on the reduction of the Greek debt could start from the spring meeting of the IMF, which will take place in Washington on April 17-19.