IMF tempted to pull the plug on Greece, report says

The International Monetary Fund is considering ending its support to Greece, a report to be published in Der Spiegel on Monday says quoting an unidentified European Union official.

Greece could default as soon as September, according to the same report, which claims that patience of officials at the Washington-based organization with Greece is wearing thin.

?High ranking officials at the Fund have informed the European Union that the IMF is no longer willing to provide Greece with more aid,? according to a translated version of the report.

The IMF has maintained that Greece must reduce its debt-to-GDP ratio to 120 percent by 2020 if its debt is to become sustainable in the medium term, but its officials are very pessimistic about the country’s ability to do so, according to the report.

?Giving the country more time to meet its targets would, according to troika estimates, mean an extra 10 to 50 billion euros in relief aid,? the report said. But many eurozone governments are unwilling to give Greece more leeway, it said.

At the same time, most governments see the risks from a Greek eurozone exit as manageable, it added.

Representatives from the EU/ECB/IMF troika are expected in Athens this week for a fresh assessment of the new government’s economic program.

Athens has a 3.2-billion-euro bond held by the ECB to pay when it matures on August 20. Given that there will be no loan tranche due until after eurozone leaders have analyzed the troika?s report in September, it is not clear how this bond will be paid.

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