IMF may fund Greek bailout with small amount, for 1 year
The International Monetary Fund may finance Greece’s current bailout program with a small amount for one year, the country’s government spokesman said on Thursday, adding that the issue was under discussion between Athens and its creditors.
Greece’s current bailout, its third since the debt crisis broke out 7 years ago, ends in 2018. The second review of its progress on reforms has dragged on for months, mainly due to a rift between the EU and the IMF over its fiscal targets.
“What is under discussion is a small IMF funding program, which will last for one year and end at the same time with the ESM (European Stability Mechanism) program, in August 2018,” Dimitris Tzanakopoulos told reporters.
Greece wants to conclude the review as soon as possible to receive bailout loans to pay off debt maturing in July.
The review will also help the country qualify for inclusion in the European Central Bank’s quantitative easing program, which would help its return to bond markets before its program ends.
Prime Minister Alexis Tsipras faces national elections in 2019.
But the review talks have dragged on and the IMF has not yet decided whether to join the latest bailout. The fund’s participation is seen as a condition for Germany to unlock new funds to Greece.
Athens hopes to discuss the fund’s participation, its post-bailout fiscal path and the prospect of further debt relief at the sidelines of the International Monetary Fund’s spring Meetings in Washington this week.
Greek Finance Minister Euclid Tsakalotos is expected to meet the IMF’s Chief Christine Lagarde and German Finance Minister Wolfgang Schaeuble on Friday.
EU and IMF mission chiefs will return to Athens on April 25th, Tzanakopoulos said, to finalize a set of reforms Greece agreed to adopt to convince the IMF to participate with funds in its current bailout.
However, the EU Commission said on Thursday that there was no date yet for the mission chiefs’ return to Athens.
It is unlikely that the bailout review will be wrapped up before May 22nd, when eurozone finance ministers are set to meet in Brussels to discuss the Greek issue, the spokesman said.
“I don’t think it is possible to make it, to conclude the bailout review before May 22nd,” Tzanakopoulos said. [Reuters]