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Thursday 29 September 2016

Greece Crisis: IMF will only approve new loans for Greece if agreement reached with Europe

Jason Lange

Published 31/07/2015 | 01:30

Greek Finance Minister Euclid Tsakalotos and International Monetary Fund (IMF) Managing Director Christine Lagarde (back C) attend an euro zone finance ministers meeting in Brussels earlier this week. Photo: REUTERS/Francois Lenoir
Greek Finance Minister Euclid Tsakalotos and International Monetary Fund (IMF) Managing Director Christine Lagarde (back C) attend an euro zone finance ministers meeting in Brussels earlier this week. Photo: REUTERS/Francois Lenoir

The International Monetary Fund can only approve new loans for Greece after Athens reaches an agreement with European governments that would ensure it can pay its debts, an IMF official said on Thursday.

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"The IMF can only support a program that is comprehensive," the official said in a telephone briefing with journalists, adding that it "will take some time" before Greece and its European creditors can lay the necessary groundwork for a new IMF program.

CRISIS MEETING: Michael Noonan pictured with IMF chief Christine Lagarde (centre); Dutch Finance Minister Jeroen Dijsselbloem, second left; Italy’s Finance Minister Pier Carlo Padoan, far left, and France’s Finance Minister Michel Sapin, far right, at a Greek debt meetiing in Brussles last week
CRISIS MEETING: Michael Noonan pictured with IMF chief Christine Lagarde (centre); Dutch Finance Minister Jeroen Dijsselbloem, second left; Italy’s Finance Minister Pier Carlo Padoan, far left, and France’s Finance Minister Michel Sapin, far right, at a Greek debt meetiing in Brussles last week

The IMF has teamed up with the European Union and the European Central Bank in recent years to lend Greece money repeatedly to save it from a debt crisis.

Athens and Brussels this week started a new round of negotiations on an 86 billion euro ($93.8 billion) bailout after striking a preliminary deal earlier this month.

Demonstrators gather near the Greek Parliament during a rally against the government's agreement with its creditors in Athens, in central Athens. Photo: AP Photo/Emilio Morenatti
Demonstrators gather near the Greek Parliament during a rally against the government's agreement with its creditors in Athens, in central Athens. Photo: AP Photo/Emilio Morenatti

The IMF official said the international lender would actively participate in new talks and the Fund's board on Wednesday authorized discussions on a new Greek lending program.

But there is "no expectation" that talks over the next couple of weeks will get to the point where the IMF can approve a new program, said the official, who spoke on condition of anonymity.

Greek Finance Minister Euclid Tsakalotos and International Monetary Fund (IMF) Managing Director Christine Lagarde (back C) attend an euro zone finance ministers meeting in Brussels earlier this week. Photo: REUTERS/Francois Lenoir
Greek Finance Minister Euclid Tsakalotos and International Monetary Fund (IMF) Managing Director Christine Lagarde (back C) attend an euro zone finance ministers meeting in Brussels earlier this week. Photo: REUTERS/Francois Lenoir

The IMF and the United States argue that Greece's loan burdens are unsustainable and have advocated for an easing of some of the terms of Greece's debts to international creditors. European governments have resisted the idea as they negotiate with Athens on further bailout funds.

The IMF also wants Athens to enact laws that would overhaul its economy. It sees debt relief concessions made by the Europeans and economic reforms enacted in Greece as necessary for ensuring Greece can pay back its debts over the long run.

"It will take some time before the two sides are ready to take these decisions," the IMF official said.

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Reuters

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