LUXEMBOURG Greece will solely obtain extra loans from the euro zone if the International Monetary Fund joins its newest assist program, the top of the bloc’s bailout fund mentioned on Monday, spelling out a situation to date disregarded by Athens’s collectors.
Greece wants a brand new tranche of economic assist below its 86 billion euro bailout by the third quarter of the 12 months or it faces the danger of defaulting on its money owed.
Under the present program, Greece’s third since 2010, loans have been disbursed by euro zone collectors with out the formal participation of the IMF, though that has at all times been a requirement.
But with elections coming within the Netherlands and Germany — two of probably the most adamant supporters of the IMF position within the bailout, the collectors need to apply the agreed situations for brand spanking new loans to Athens extra strictly.
Klaus Regling, who chairs the European Stability Mechanism (ESM), mentioned an extra slice of economic assist can solely be issued as soon as the IMF decides to be a part of this system.
“That is my working assumption because our member states wanted it that way. It is the institutional arrangement that we agreed on in the past,” Regling advised reporters in Luxembourg.
The IMF will talk about its position within the Greek bailout in a board assembly on Feb. 6. In a report leaked final week, the IMF mentioned Athens’s debt will rise to an unsustainable 275 p.c of its gross home product by 2060 if no sizeable debt aid is given to Athens by its collectors.
Germany, the euro zone’s largest financial system, has opposed large-scale debt aid until Greece completes wide-ranging reforms and retains working finances surpluses of three.5 p.c for the medium-term after the tip of the bailout program in 2018.
Regling mentioned the IMF doesn’t want to supply funds however its experience is required. EU officers mentioned the IMF just isn’t anticipated to take part in assist packages simply as an adviser, and a distinct position could require adjustments in its procedures that the fund could not need to undertake.
In a daily month-to-month assembly final week in Brussels, euro zone finance ministers delayed any choice on a brand new disbursement of assist to Greece. EU officers mentioned a deal was attainable on the subsequent assembly in February.
Regling mentioned he was “very nervous” on the prospect of the IMF strolling away from this system as a result of some euro zone states contemplate its participation essential. He mentioned the euro zone is working to maintain the IMF, which participated within the first two bailout packages for Greece, on board.
He declined to touch upon whether or not a newly negotiated bailout program could be wanted for Greece if the IMF determined to not take part.
(Editing by Hugh Lawson)