International Monetary Fund (IMF) European department chief Poul Thomsen said that the fund is unlikely to rejoin Europe in more financing of Greece in the near future. He said that the IMF’s EU department would be in Athens soon to restart stalled talks over a new emergency-financing facility.
The IMF wants:
- debt restructuring
- further pension reforms
- a speed up in the privatization fund
Thomsen said that there is “full agreement” within the IMF concerning what the main components of a Greek program should be. The IMF’s participation on a Greek program has been on ice because the group believes that Greece’s debt isn’t viable. The IMF has put its foot down regarding this and is unwilling to support a rescue program that won’t work. It has called on EU governments to restructure their loans, otherwise Athens solvency is at risk. Germany, however, leads the EU-bloc interested in seeing reforms without debt relief.
Greece has relied on financing from the rest of the Eurozone since July 2015. It’s current bailout program is worth 86 billion euros and runs out in 2018.
Germany wants the IMF on board, however it is reluctant to grand Greece debt relief. On its part, the IMF will not join the bailout without ensuring Greece’s debt sustainability first. “We have some significant concerns about risks,” said Thomsen, pointing to deficits in the pension system of more than 10-11 percent of gross domestic product a year.
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