Greece wants the International Monetary Fund to abstain from the third bailout program and make the Greek debt, Greek Prime Minister Alexis Tsipras said.
In an interview on state broadcaster station ERT on Monday night, Tsipras said that Greece had not asked for the IMF to participate in the country’s third bailout.
The Greek prime minister said that the country doesn’t need the IMF now because its financial needs are substantially less. For instance, he said, the initial estimate on bank recapitalization was 25 billion euros and the total amount needed for the recapitalization was 5.7 billion euros. This means that the 86-billion-euro bailout program has been reduced by 19 billion.
Furthermore, he said, “the IMF goes to our European partners and makes suggestions that we cannot accept. They ask for very harsh reforms that cannot be accepted by politicians, much less society. Their stance is not constructive”.
Despite the PM’s opinion, Greece’s European creditors have started considering the idea of IMF participation. The IMF insists that there should be a Greek debt haircut to make it sustainable, otherwise the Fund will not contribute financially.
However, the European Commission opposes any suggestion of a haircut. They only talk about debt restructuring. Therefore, they prefer keep the IMF in its present role as adviser only.
There is a financial point as well, since the IMF lends to Greece at 3.8 percent interest rate, while the European Stability Mechanism lends at 1 percent.
A hurdle that Greece needs to overcome is Germany. Greece’s major lender insists that the IMF should remain in the program as adviser and financial contributor as well.
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