NEWS

Amid IMF turmoil, Greece tops eurozone agenda

Eurozone finance ministers are due to meet in Brussels today to discuss possible further financial assistance for Greece as well as to rubber stamp a bailout for Portugal.

The meeting comes in the wake of the arrest of International Monetary Fund managing director Dominque Strauss Kahn in New York. The Frenchman had been due to meet with eurozone finance ministers at the sidelines of their gathering to discuss the situation in Greece.

His detention in connection to an alleged sex attack in the USA has prompted concern in Athens that it could lead to a delay in any further assistance to Greece as Strauss-Kahn had been at the forefront of discussions about a new bailout for Athens.

German newspaper Die Welt reported on Monday that there is a group of officials within the IMF that is skeptical about Greece receiving additional financial aid because of the country’s «disappointing» reform program and poor privatization and deficit reduction efforts.

Citing top level European Union diplomats, the paper reports that further aid is likely to be extended to Greece because «there is no other alternative.» The newspaper suggests Greece would be extended a combination of billions of euros in loans, an extension on the maturity of its debt and a reduction on the interest rates it pays.

European Economic and Monetary Affair Commissioner Olli Rehn told the newspaper that Greece has no alternative to its current reform program, which it needs to speed up while also implementing its agreed-to privatization plan, the newspaper writes. It is also «absolutely urgent» that Greece’s political parties stop disputing, Die Welt writes.

Government spokesman Giorgos Petalotis said on Sunday that regardless of Strauss-Kahn?s arrest, Athens would continue to follow the terms of the first bailout and to discuss its position with other IMF representatives. ?The Greek government deals with institutions, not individuals, and continues unimpeded to implement the program that will get it out of the crisis,? he said.

Strauss-Kahn?s deputy, John Lipsky, was appointed acting head while Strauss-Kahn remains in custody in New York on suspicion of assaulting a hotel chamber maid. Another deputy managing director, Nemat Shafik is expected to attend the meetings that Strauss-Kahn had been due to take part in this week, where the Greek economy was to be a main topic of discussion.

The turmoil at the IMF comes amid growing speculation that Greece will miss out on the fifth tranche of its 110-billion-euro loan, which is due in June, and will have to agree a new deal with the EU and the Washington-based fund that will lead to the government having to sign up to even tougher terms, such as substantial sackings in the public sector.