IMF’s Greek compromise could break impasse on aid deal
AFP, Washington :
The IMF’s proposed compromise on Greece raises hopes it will break a deadlock with Europe next week and open the way for the release of desperately needed funds for Athens, averting a renewed crisis in July.
The International Monetary Fund is not bending its rules to help crisis-ridden Greece, but is helping to resolve an impasse over a new aid program, while continuing to insist on steps to reduce the country’s massive debt burden, an IMF spokesman said Thursday.
Coming just a week before a key Eurogroup meeting, the IMF has offered to revive a seldom-used option in its toolkit that allows the possibility of approving a new aid program for Greece, but without releasing any funds until certain conditions are met: in this case more specific commitments from Europe to bring the debt repayments to a manageable level.
Germany has resisted providing more debt relief, not least because it faces legislative elections in September, nor will it agree to a new loan for Athens unless the IMF also participates.
The impasse has lasted for months and now threatens to generate another crisis in Athens, which has a seven billion euro debt payment due in July.
The new interim step the IMF has offered could unlock the next installment of the 86 billion euro aid package the euro zone approved for Greece in 2015. However, it also raises questions about whether the IMF is bowing to political pressure from Berlin.
“Our understanding is that the European partners could go ahead with a disbursement in this situation so it would avoid a destabilizing situation in July,” spokesman Gerry Rice told reporters of the compromise plan.
While the IMF is pushing to have an agreement at next week’s Eurogroup meeting that includes an outline for more specific debt relief measures as the “first best solution,” Rice said the compromise option would “help catalyze financing and debt relief.”
“We’re hoping there can be an agreement next week. We’re making good progress, the differences are narrowing,” he said.
The IMF’s proposed compromise on Greece raises hopes it will break a deadlock with Europe next week and open the way for the release of desperately needed funds for Athens, averting a renewed crisis in July.
The International Monetary Fund is not bending its rules to help crisis-ridden Greece, but is helping to resolve an impasse over a new aid program, while continuing to insist on steps to reduce the country’s massive debt burden, an IMF spokesman said Thursday.
Coming just a week before a key Eurogroup meeting, the IMF has offered to revive a seldom-used option in its toolkit that allows the possibility of approving a new aid program for Greece, but without releasing any funds until certain conditions are met: in this case more specific commitments from Europe to bring the debt repayments to a manageable level.
Germany has resisted providing more debt relief, not least because it faces legislative elections in September, nor will it agree to a new loan for Athens unless the IMF also participates.
The impasse has lasted for months and now threatens to generate another crisis in Athens, which has a seven billion euro debt payment due in July.
The new interim step the IMF has offered could unlock the next installment of the 86 billion euro aid package the euro zone approved for Greece in 2015. However, it also raises questions about whether the IMF is bowing to political pressure from Berlin.
“Our understanding is that the European partners could go ahead with a disbursement in this situation so it would avoid a destabilizing situation in July,” spokesman Gerry Rice told reporters of the compromise plan.
While the IMF is pushing to have an agreement at next week’s Eurogroup meeting that includes an outline for more specific debt relief measures as the “first best solution,” Rice said the compromise option would “help catalyze financing and debt relief.”
“We’re hoping there can be an agreement next week. We’re making good progress, the differences are narrowing,” he said.