Critical IMF meetings on Wednesday – Fear of a new credit crunch

5 October 2016
126 Views

The Minister of Finance Euclid Tsakalotos will travel to Washington, DC for a series of critical meetings with IMF officials in order to discuss the Fund’s participation in the Greek bailout program. The latest sources however have noted that the IMF is geared towards not participating in the Greek program.

According to a report in Ta Nea, the IMF, EU and ECB will have the opportunity t discuss all major issues that remain unresolved. This includes whether Europe will proceed with mid-term debt-relief measures for Greece and whether the ECB will include Greek bonds in the quantitative easing program.

At present there is major uncertainty on the issues, with a European official estimating that the IMF will not participate in the program, since Germany will not give in to the IMF’s pressure on debt relief. The official cited by Bloomberg is said to reflect the opinions of the Eurogroup.

Should the IMF decide against participating in the bailout, Greek bonds may consequently not be included in the ECB’s QE program, since the country’s debt will not be considered sustainable. This development will then put the ECB in a difficult position.

The IMF is expected to publish its own debt sustainability analysis in December, based on the review of the Greek economy recently carried out by its officers. Until then, the Greek government will push forward with the second bailout review, in hopes of concluding it by the end of the year.

As such, the Greek government will have to resolve and address all remaining prior actions within the week, in order for the upcoming Eurogroup next Monday to approve the disbursement of the 2.7-billion-euro tranche and begin the second review on 17 October. The ECB has argued that aside from a sustainable debt, completion of the second bailout review is a necessary condition for Greek bonds to be included in its QE program.

You may be interested

Nafplio: The wonderful first capital of Greece
GREECE
shares70 views
GREECE
shares70 views

Nafplio: The wonderful first capital of Greece

Panos - Oct 19, 2017

One of the most beautiful towns in the area of Argolis (in eastern Peloponnese) as well as one of the…

Tsipras at Brookings Institute: “Now is the time to trust Greece”
GREECE
shares59 views
GREECE
shares59 views

Tsipras at Brookings Institute: “Now is the time to trust Greece”

Panos - Oct 19, 2017

Now is the time to trust Greece as its economy is turning a corner and exiting the crisis, Prime Minister…

Merchant Marine Minister Declares Athens Coastline Almost Oil Free
GREECE
shares49 views
GREECE
shares49 views

Merchant Marine Minister Declares Athens Coastline Almost Oil Free

Panos - Oct 19, 2017

The Greek government said that the cleanup of a section of Athens coastline polluted by a large oil slick more…

Leave a Comment

Your email address will not be published.