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IMF Official’s Statement “Greece will Need 3. Bailout” Angers Greek FinMin and the IMF

The statements of Greece’s representative to International Monetary Fund annoyed Athens. “Greece will need a third bailout” Thanos Catsambas said in an interview to Wall Street Journal published on Thursday. Prompt was the angry answer by Finance Minister Yiannis Stournaras to said – more or less -Catsambas has nothing to say on the issue. In the same wave length was also the comment by the IMF.
Catsambas, assigned to IMF by Papademos government on January 2012, felt the pressure of the Greek politics. He issued a press release, where he says that there was never talk about a “third bailout” during the interview.
 Catsambas who follows very close the IMF Greece relations revealed also that Papademos government had managed to meet “only 22% of the commitments under the troika-supported program were implemented.”
Catsambas prediction of a third bailout angered the Greek government and prompt was the answer of finance minister Yiannis Stournaras who told Reuters: “The country΄s positions are formulated by the Prime Minister and the Finance Minister.”

IMF official: Greece will need third bailout

Greece will need a third bailout package from the euro zone, and the country΄s European creditors will have to find the money for it, according to a senior International Monetary Fund official.”Greece will require additional financing, which may take the form either of official-sector involvement or of additional loans, hopefully on more favorable terms,” Thanos Catsambas, an IMF alternate executive director, who represents Greece at the Fund΄s board, said in an interview.
The creditors are unanimous that this is Athens΄ last chance if the financing is to continue. Without the loan payment, the government would run out of cash in a matter of weeks and would have to find new ways of meeting its current obligations, such as pensions and public-sector wages. In an extreme scenario, this may require leaving the euro zone and printing a new currency.

Mr. Catsambas called this last option “an undesirable eventuality that will set the country back many decades.”

Mr. Samaras has asked his euro-zone partners for a two-year extension to meet budget deficit reduction targets, something that would create an extra €20 billion funding gap for the period. The government has explored funding this with increased issuance of shorter-term treasury bills, thus avoiding direct extra financing from its creditors, but Mr. Catsambas said it would be “totally unrealistic” to assume that Greece could fill the gap entirely on its own.

Mr. Catsambas insisted that it should be the euro zone and ECB that take the strain of filling the rest of the gap.

“Extension of repayment of the IMF [part of] loans is impossible as all terms and conditions of IMF loans to all countries are based on rules that are not negotiable,” he said. The failure of Greece to implement its agreements, and the lack of a sustainable debt trajectory, make it impossible for the IMF, under its own charter, to lend any more.

Mr. Catsambas said that the previous coalition government under Lucas Papademos, who took over from George Papandreou in November last year, estimated that “only ” in 2011. Mr. Catsambas noted that the public sector still needs to be shrunk as a result.

One option to restore Greece΄s debt trajectory to health would be another cut on the interest rate it pays on loans from euro-zone governments. More controversial options include having the ECB and euro-zone national central banks accept a rescheduling of their debts over a much longer period. The most controversial option would be for a 30% reduction—or haircut—in the value of their Greek bonds, said one official familiar with the discussions.

Another scenario calls for euro-zone governments to accept haircuts on bilateral loans they made to Greece that could amount to between €30 billion and €50 billion.

But no euro-zone creditor has signaled any intention to lend more money to Greece and the Eurosystem has shown no willingness to restructure its €50 billion portfolio of Greek debt, a step that would be a public-relations disaster for a central bank keen to reassure the German public and government that it won΄t print money simply to fund public deficits.

Mr. Catsambas acknowledged that such official-sector involvement, or OSI as it is known, would be difficult to agree, however necessary it may seem.

“The difficulty with OSI is that it sets a possible precedent for other borrowers, which, of course, euro-zone countries and the ECB would rather avoid,” he said.

Greece denies report it will need third bailout

Greece΄s Finance Minister on Thursday denied a report citing the country΄s representative to the IMF as saying Athens would need a third bailout package.

“The country΄s positions are formulated by the Prime Minister and the Finance Minister,” Yannis Stournaras told Reuters. (via

It looks that not only Stournaras got angry but also the IMF was not pleased about  Catsambas’ statements. IMF sources said that “Catsambas does not represent the IMF’s views”. Gerry Rice, the spokesman of IMF,  also dismissed Catsambas claim not no program extension and said that “there were good arguments” for the extension of the program beyond the set time limits.

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  1. Dear KTG folks,

    I love your website and have been reading it for ages. But sometimes I have difficulty understanding what the eff your trying to say. Could I offer my services in editing and correcting the articles because the grammar and spelling mistakes are driving me crazy. Otherwise keep up the good work. Between this website and athens news, I finally know what is happening in Greece.

  2. I’m sure the offer is much appreciated, but too late.

    The European Commission has just announced an agreement whereby English will be the official language of the European Union rather than German, which was the other possibility.
    As part of the negotiations, the British Government conceded that English spelling had some room for improvement and has accepted a 5- year phase-in plan that would become known as “Euro-English”.
    In the first year, “s” will replace the soft “c”. Sertainly, this will make the sivil servants jump with joy. The hard “c” will be dropped in favour of “k”. This should klear up konfusion, and keyboards kan have one less letter. There will be growing publik enthusiasm in the sekond year when the troublesome “ph” will be replaced with “f”. This will make words like fotograf 20% shorter.
    In the 3rd year, publik akseptanse of the new spelling kan be expekted to reach the stage where! more komplikated changes are possible.
    Governments will enkourage the removal of double letters which have always ben a deterent to akurate speling.
    Also, al wil agre that the horibl mes of the silent “e” in the languag is disgrasful and it should go away.
    By the 4th yer people wil be reseptiv to steps such as replasing “th” with “z” and “w” with “v”.
    During ze fifz yer, ze unesesary “o” kan be dropd from vords kontaining “ou” and after ziz fifz yer, ve vil hav a reil sensi bl riten styl.
    Zer vil be no mor trubl or difikultis and evrivun vil find it ezi tu understand ech oza. Ze drem of a united urop vil finali kum tru.
    Und efter ze fifz yer, ve vil al be speking German like zey vunted in ze forst plas.


  3. On a more serious note, why does this “interview” coincide with the hard stance taken by Venizelos and Kouvelis re the Troika demands on changes, especially the thorny sacking of 150,000 civil servants.
    I smell a rat here, and the playing of political games…

  4. AHahahaha! reders her mak cras curs in KTG-English!

  5. your offer is much appreciate, Rani!

  6. Which Greek government appointed this man? And IS he still in function? I found this intriguing quote on Neo Fakeli

    On Monday, February 21 at 23.00 on Skai Alexis Papahelas speaks with Greek ex-Assistant Director in the Fiscal Affairs Department of the International Monetary Fund. Thanos Catsambas, the most senior Greek official at the IMF until his retirement some time ago, speaks at his first TV interview on Greek television program for Greece, the economic outlook, but the Greek government relationship – International Monetary Fund after the tensions of last week.

    It looks like this was February 2011?!

  7. where’s the problem? Greek media wrote he replaced Roumeliotis (the guy who said Papandreou and IMF knew the program will fail) in IMF. He retired from IMF and went back as Greece’s representative -as an IMF expert.
    I don’te remember right now when Roumeliotis left IMF.

  8. I don’t know it there is any problem. That’s why I wanted to know who appointed him and when. When he replaced Roumeliotis it must have been after GAP? So, it must be Papademos/Venizelos with the blessing of Samaras. Or Samaras/Stournaras with the blessing of Venizelos and Kouvelis. It’s always good to know who his masters are. Might explain some of the questions around these statements and denials. Isn’t it?

  9. But sometimes I have difficulty understanding what the eff _your_ trying to say.

    Oh the irony, 😀 (sorry Rani, but I couldn’t resist pointing out that one).

  10. The Papademos government appointed Katsambas.

  11. yes, in January 2012. and Papaconstantinou appointed Roumeliotis 8Nov2011, one week before Papandreou left PMinistry.

  12. It’s pure and unadulterated speculation, no one knows if Greece will need a third loan package.

  13. Very true, but at the rate the Troika are playing games with the Greek People, they would seem to be making sure Greece will need another package. Just wonder what the cost to Joe Soap will be, and if Joe Soap is once again going to just accept another kick in the teeth?
    Have you noticed that the constant delay in “making a decision” is going hand in hand with ever more draconian new tax measures, like abolishing the 5,000€ tax free limit? In theory, this means that unemployed people would end up paying 18% tax on their 3000€ a year “benefit”. I have not yet found any indication of the unemployed being named as exempt to this IMF proposed measure. With 500,000 a year tax free in the pocket, Mme Lagarde has some nerve sending her puppets in with proposals like this.