IMF threatens to pull out of Greek bailout

IMF threatens to pull out of  Greek bailout
Greek Prime Minister Alexis Tsipras smiles before a ruling Syriza party parliamentary group session in Athens.

Brussels - Greek PM Tsipras faces revolt over bailout plan



By Agencies

Published: Thu 16 Jul 2015, 9:32 PM

The International Monetary Fund (IMF) has threatened to pull out of bailouts for Greece unless its European partners produce a clear plan for debt sustainability.
A confidential study by the fund called for much more debt relief than European countries, particularly Germany, have been prepared to countenance so far.
The IMF, which has partnered with the European Commission and European Central Bank in the two previous, failed rescues of Greece, is seeking more details on how the new plan agreed on Monday will stabilise Greek finances in the short term and over the long run.
EU officials said the plan, which requires tough reforms of Greece for up to ?86 billion ($95 billion) in financial aid through 2018, would require the IMF as a partner in funding and programme monitoring.
But the IMF wants to be sure the EU partners have a solid plan that will make it possible for Greece to repay its debts over the long term.
"European member states would like the IMF to stay involved, but clearly, it will have to meet our criteria," an IMF official told journalists.
"One such criteria is debt sustainability, and we have to have an agreement that is sufficiently comprehensive and credible." He called the agreement reached between Athens and European leaders "not very concrete", with some key issues not discussed.
The IMF report said European countries would have to give Greece 30 years grace on servicing its European debt, and dramatic maturity extensions. If not, it said, they must make annual transfers to Greece or accept deep haircuts (reductions) on existing loans.
Germany reacted to the IMF report saying it could consider letting Greece pay off its debt over a longer time but only if this does not amount to a backdoor way of reducting what it owed.
Greece Prime Minister Alexis Tsipras battled to win lawmakers' approval on Wednesday for the bailout deal to keep Greece in the euro.
Dozens of MPs, including senior Syriza figures and the government's junior coalition partner, may partially or fully reject the bailout, forcing Tsipras to rely on pro-European opposition lawmakers to carry the vote, which was expected after midnight.
"The choice between a bailout or catastrophe is a choice made in the face of terror," Panagiotis Lafazanis, who heads the far-left flank of Syriza, told reporters.


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