The IMF Gets Behind Greece With Debt Relief Demand
In a move that looks at once like a boost for Greece's economic cause and grounds for further complication among eurozone member countries, the International Monetary Fund on Tuesday warned that it might pull its support for the proposed bailout plan unless other nations agree to whittle down some of Greece's debt.
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In a move that looks at once like a boost for Greece’s economic cause and grounds for further complication among eurozone member countries, the International Monetary Fund on Tuesday warned that it might pull its support for the proposed bailout plan unless other nations agree to whittle down some of Greece’s debt.
As The New York Times explained, this news isn’t likely to go over well in Germany:
The aggressive stance sets up a standoff with Germany and other eurozone creditors, which have been reluctant to provide additional debt relief. The I.M.F role is considered crucial for any bailout, not only to provide funding but also to supervise Greece’s compliance with the terms.
A new rescue program for Greece “would have to meet our criteria,” a senior I.M.F. official told reporters on Tuesday, speaking on the condition of anonymity. “One of those criteria is debt sustainability.”
[…] But Germany and other countries, including the Netherlands and Finland, are loath to grant Greece easier terms, which are a tough sell to their own voters. German Chancellor Angela Merkel has ruled out a “classic haircut” on Greece’s debt.
The I.M.F. is now firmly siding with Greece on the issue. In a report released publicly on Tuesday, the fund proposed that creditors let Athens write off part of its huge eurozone debt or at least make no payments for 30 years.
Read the IMF’s report in detail here.
–Posted by Kasia Anderson
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