Cyprus Mail

Greece accepts IMF participation in bailout plan – Dijsselbloem

IMF Managing Director Christine Lagarde

By Jan Strupczewski and Francesco Guarascio

Greece accepts that the International Monetary Fund has to take part in the bailout programme under which Athens receives billions of euros in loans in exchange for economic reforms, the chairman of eurozone finance ministers said on Thursday.

Greek Prime Minister Alexis Tsipras had said in December that the participation of the IMF in the bailout, Greece’s third since 2010, was not necessary and that the programme could be handled by eurozone authorities alone.

But the participation of the IMF is a key condition for Germany, which believes the European Commission alone as the representative of creditors could be too soft on Athens when it comes to reform implementation.

“(Greek Finance Minister Euclid) Tsakalotos confirmed to me that the Greek government accepts that the IMF needs to be part of the process,” Jeroen Dijsselbloem told reporters before a ministerial meeting to discuss Greece’s reform progress.

But for the IMF to be part of the scheme, under which Greece might receive up to 66 billion euros in new aid, the Fund wants Athens to push through pension reforms and the euro zone to agree to re-profile Greek debt to cut its net present value.

“To get the IMF on board, they have been very clear they want a deep and thorough pension reform, a solid budget, fiscal issues to be addressed and they want a sustainable debt and then they will step back in,” Dijsselbloem said.

Greece submitted its pension reform plan to Brussels last week and euro zone officials have said it was ambitious and acceptable in its broad architecture, but it was still unclear whether it would have the desired fiscal impact because it lacked some numeric data.

“It’s a serious proposal,” Dijsselbloem said. “The key question is whether in terms of financial sustainability it all adds up,” Dijsselbloem said.

Euro zone ministers will hold Greek debt relief talks – which will focus on loan maturities, grace periods and interest rate reduction – only once Athens gets their approval for a package of reforms agreed under the bailout.

That approval, called the “conclusion of the first review” could come in February, some euro zone officials have said. But Dijsselbloem was less upbeat: “It would rather be months than weeks.”

Officials note that parliamentary elections in Ireland and Slovakia over the next two months were likely to weigh on the timing of the Greek debt discussion, because neither Dublin nor Bratislava would want the issue to influence their voters.

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