Cyprus Mail

EU/IMF rift on Greek debt is hurting country-Tsipras (Updated)

Greek Prime Minister Alexis Tsipras

A rift between the International Monetary Fund and the European Union on how to address Greece’s debt crisis is damaging for the country, Prime Minister Alexis Tsipras said on Sunday.

The IMF has yet to decide whether to participate in a third international bailout Greece signed up to in July last year, saying it is not convinced the country’s debt is sustainable or its fiscal targets feasible.

Greece’s debt to GDP ratio exceeds 170 percent of national output, the highest in the euro zone.

“I would say that what is creating conditions of delay in regaining trust of markets and investors … is the constant clash and disagreement between the IMF and European institutions,” Tsipras told a news conference in the northern city of Thessaloniki.

He said those disagreements were preventing the inclusion of Greek debt in the European Central Bank’s quantitative easing (QE) asset purchase programme. The ECB has said it cannot specify when it could start buying Greek bonds, but that Greece needs to pass a debt sustainability analysis before it happens.

Lenders have promised to look at how Greece’s debt mountain can be made sustainable, and whatever they decide will swing whether the IMF decides to sign up for the latest bailout deal.

Tsipras said time was pressing.

“A country which has made such harsh adjustment cannot wait much more … It is entitled to a fair regulation of the debt issue,” he said. “The Greek problem is a European problem.”

On Friday, euro zone finance ministers called on Greece to stay on track with reforms it must pursue under the bailout, which is worth up to 86 billion euros, ahead of a second review of the accord that is expected to start in October.

This month, it needs to pursue energy market reforms, create a new body to oversee privatisations and establish a new independent revenue agency.

Tsipras said Greece had already completed 70 percent of reforms required under the bailout programme.

“Normally, we should have already reaped the fruits. We should have received not only the waiver but also the QE,” he said, referring to the ECB including Greek bonds in its 80 billion euros per month of asset purchases.

“But we don’t have it … and this is because there is this disagreement between the IMF and Germany.”

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