Monday 23 October 2017

Greece crisis: IMF won't back Greek deal without reforms

Greek Prime Minister Alexis Tsipras
Greek Prime Minister Alexis Tsipras

Christopher Donville

The International Monetary Fund can participate in discussions over the latest financial rescue for Greece but cannot officially join the talks until after the fiscally beleaguered nation has agreed to comprehensive reforms, the 'Financial Times' reported yesterday.

Meanwhile in Athens, Greek Prime Minister Alexis Tsipras confronted rebels within his own party for not backing his deal with creditors, in a showdown that could put Europe's most indebted state on course for snap elections.

Speaking to a central committee meeting of the Syriza governing party, Mr Tsipras challenged dissenters to hold a party ballot on Sunday if they reject his decisions. He also called for an emergency congress in September to gauge his support. The committee will decide on the initiatives after about a quarter of the party's lawmakers rejected Mr Tsipras's move to seek a new bailout.

The premier dared those who wanted another leader to say so, adding that he wasn't going to be the one to lead Greece to "catastrophe".

A formal party split would strip his coalition of its parliamentary majority and could force him to hold elections. Two officials have said an election could take place as soon as directly after Syriza's congress.

"Whoever thinks another government and another prime minister would do better should speak up," Mr Tsipras said.

The so-called Left Platform of Syriza, led by former energy minister Panagiotis Lafazanis, accuses Mr Tsipras of violating the mandate voters gave him in January and in a July 5 referendum that saw Greeks oppose more austerity measures.

Mr Lafazanis was replaced as energy minister after leading a revolt against the new agreement for as much as €86bn attached to belt-tightening conditions.

The dissent has forced Tsipras to rely on opposition support to pass policies demanded by creditors.

The FT report, citing a confidential summary it obtained of the IMF board's meeting on Wednesday, said IMF staff had determined that while the Fund could participate in negotiations aimed at providing a third round of relief to Greece, the country was disqualified for any IMF bailout given its high debt levels and poor reform record.

"The Fund will only decide whether to participate during a 'stage two' after Greece has 'agreed on a comprehensive set of reforms' and, crucially, after Eurozone bailout lenders have 'agreed on debt relief'," adding that IMF staff were not in full agreement on the issue.

It means an IMF decision on any further bailout for Greece could stretch for months and possibly into 2016 (Reporting Bloomberg and Reuters)

Irish Independent

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