GiveMeLeverage
& I will remove the world
Eurozone says no Greek deal without IMF
Peter Spiegel in Brussels, Alex Barker in Riga and Stefan Wagstyl in Berlin
European leaders have told Greece there will be no deal to release desperately needed bailout aid without approval from the more hardline International Monetary Fund, setting up a stand-off that could leave cash-strapped Athens without funds well into June.
The message, delivered by Angela Merkel, the German chancellor, to Alexis Tsipras, her Greek counterpart, at a private meeting in Riga, Latvia’s capital, as well as by lower-level European officials to their Greek interlocutors, comes as the IMF has been weighing whether to withhold its €3.6bn portion of the €7.2bn bailout tranche Athens needs to avoid default.
Eurozone and Greek negotiators have been pushing to complete a deal by the end of the month to free up bailout funds before the first in a series of loan repayments owed the IMF totalling €1.5bn falls due June 5. But securing IMF approval for a bailout deal significantly complicates that timeline.
IMF officials believe Mr Tsipras’s government has reversed many of the economic reforms the IMF had agreed with previous Greek governments and do not feel Athens will be able to hit budget targets that would allow its growing debt pile to be reduced quickly.
IMF staff have told their board they would not disburse aid without a “comprehensive” deal that started to lower debt levels. They also want EU assurances that Greece will be able to pay its bills for the next 12 months, a demand that could require eurozone governments to commit to another bailout programme.
"It has to be a comprehensive approach, not a quick and dirty job," Christine Lagarde, IMF chief, said at an event in Rio de Janeiro on Friday..
Greek officials have told their eurozone counterparts they are worried about the IMF’s hardline stance and have argued their conditions are politically undeliverable, especially when it comes to the pension reforms, which remain the biggest stumbling block.
The IMF has clashed with the European Commission over how tough a line to take, with the commission going so far as to moot cutting the IMF out of a deal. But German officials have bristled at the commission’s interventions and have made clear all three bailout monitors — the IMF, the commission and the European Central Bank — must approve any deal.
“The deal must be concluded with the three institutions,” Ms Merkel said at a gathering of leaders from the EU and former Soviet states on Friday. “There is very, very intensive work to be done.”
“They [Greece] have been listening to too many people who think that there may be some partial agreement,” said one senior eurozone official involved in the talks. “There will be no such thing. And there will be no agreement without IMF. And the IMF is super tough.”
According to people briefed on the Thursday night Riga meeting between Ms Merkel and Mr Tsipras, which included French president François Hollande, the chancellor expressed her concern about the slow pace of the talks, questioning why Greek negotiators had repeatedly broken off discussions with bailout monitors in recent days.
Mr Tsipras said the delay was needed to shore up political support at home, where the far left of his Syriza party has been threatening a “rupture” with international creditors and urging non-payment of debt obligations.
At the meeting, Mr Hollande supported Ms Merkel’s insistence that Greece include the IMF in an agreement, officials said.
According to officials briefed on the IMF position, the stand-off with Athens has focused on pension reforms and labour market liberalisation. IMF estimates show spending on Greek pensions has risen since Syriza took power in January and now accounts for 10 per cent of gross domestic product, which IMF staff believe is unsustainable.
The German hardline comes as Ms Merkel faces the possibility of a Bundestag revolt from within her own Christian Democratic bloc, where lawmakers have indicated they would be unwilling to approve further Greek aid without the IMF’s approval. About a third of MPs from her party group have signalled they would oppose more concessions to Greece.
Ms Merkel is known to be determined to avoid a Greek exit from the eurozone for the sake of Balkan stability and wider political considerations. But she has told party leaders she can only do so if Athens gives ground.
“She says, ‘I will do whatever I can to keep Greece in, but I can’t do it without them’,” said one top CDU MP. “At the end of the day, the party will vote as the chancellor advises, but she will have to fight for it.”
FT:
http://www.ft.com/cms/s/0/dbe443aa-0079-11e5-a908-00144feabdc0.html
Google:
Eurozone says no Greek deal without IMF - FT.com
Peter Spiegel in Brussels, Alex Barker in Riga and Stefan Wagstyl in Berlin
European leaders have told Greece there will be no deal to release desperately needed bailout aid without approval from the more hardline International Monetary Fund, setting up a stand-off that could leave cash-strapped Athens without funds well into June.
The message, delivered by Angela Merkel, the German chancellor, to Alexis Tsipras, her Greek counterpart, at a private meeting in Riga, Latvia’s capital, as well as by lower-level European officials to their Greek interlocutors, comes as the IMF has been weighing whether to withhold its €3.6bn portion of the €7.2bn bailout tranche Athens needs to avoid default.
Eurozone and Greek negotiators have been pushing to complete a deal by the end of the month to free up bailout funds before the first in a series of loan repayments owed the IMF totalling €1.5bn falls due June 5. But securing IMF approval for a bailout deal significantly complicates that timeline.
IMF officials believe Mr Tsipras’s government has reversed many of the economic reforms the IMF had agreed with previous Greek governments and do not feel Athens will be able to hit budget targets that would allow its growing debt pile to be reduced quickly.
IMF staff have told their board they would not disburse aid without a “comprehensive” deal that started to lower debt levels. They also want EU assurances that Greece will be able to pay its bills for the next 12 months, a demand that could require eurozone governments to commit to another bailout programme.
"It has to be a comprehensive approach, not a quick and dirty job," Christine Lagarde, IMF chief, said at an event in Rio de Janeiro on Friday..
Greek officials have told their eurozone counterparts they are worried about the IMF’s hardline stance and have argued their conditions are politically undeliverable, especially when it comes to the pension reforms, which remain the biggest stumbling block.
The IMF has clashed with the European Commission over how tough a line to take, with the commission going so far as to moot cutting the IMF out of a deal. But German officials have bristled at the commission’s interventions and have made clear all three bailout monitors — the IMF, the commission and the European Central Bank — must approve any deal.
“The deal must be concluded with the three institutions,” Ms Merkel said at a gathering of leaders from the EU and former Soviet states on Friday. “There is very, very intensive work to be done.”
“They [Greece] have been listening to too many people who think that there may be some partial agreement,” said one senior eurozone official involved in the talks. “There will be no such thing. And there will be no agreement without IMF. And the IMF is super tough.”
According to people briefed on the Thursday night Riga meeting between Ms Merkel and Mr Tsipras, which included French president François Hollande, the chancellor expressed her concern about the slow pace of the talks, questioning why Greek negotiators had repeatedly broken off discussions with bailout monitors in recent days.
Mr Tsipras said the delay was needed to shore up political support at home, where the far left of his Syriza party has been threatening a “rupture” with international creditors and urging non-payment of debt obligations.
At the meeting, Mr Hollande supported Ms Merkel’s insistence that Greece include the IMF in an agreement, officials said.
According to officials briefed on the IMF position, the stand-off with Athens has focused on pension reforms and labour market liberalisation. IMF estimates show spending on Greek pensions has risen since Syriza took power in January and now accounts for 10 per cent of gross domestic product, which IMF staff believe is unsustainable.
The German hardline comes as Ms Merkel faces the possibility of a Bundestag revolt from within her own Christian Democratic bloc, where lawmakers have indicated they would be unwilling to approve further Greek aid without the IMF’s approval. About a third of MPs from her party group have signalled they would oppose more concessions to Greece.
Ms Merkel is known to be determined to avoid a Greek exit from the eurozone for the sake of Balkan stability and wider political considerations. But she has told party leaders she can only do so if Athens gives ground.
“She says, ‘I will do whatever I can to keep Greece in, but I can’t do it without them’,” said one top CDU MP. “At the end of the day, the party will vote as the chancellor advises, but she will have to fight for it.”
FT:
http://www.ft.com/cms/s/0/dbe443aa-0079-11e5-a908-00144feabdc0.html
Google:
Eurozone says no Greek deal without IMF - FT.com
Ultima modifica:
)
