Madame and Madame have totally different points of view on Greece’s bailout. Christine Lagarde, head of IMF, favors a new written off of Greek debt saying that the bailout program has failed. OK, she doesn’t say it so clear, but that’s the substance. Angela Merkel, German Chancellor and head of the EU, vehemently opposes a new written off and would rather drink the bitter content of the bottle labelled “Bailout Out Extension”. Reuters has an exclusive story on the clash between Madame and Madame, or in common English, between the International Monetary Fund and the European Union. Below some excerpts.
Greece’s international lenders are at loggerheads over how to solve Athens’ debt crisis, threatening more trouble for the euro as the IMF demands European governments write off some of the Greek debt they hold.
EU leaders prefer to give Greece more time to meet bailout goals.
“The problem is not between the IMF and Athens, it’s between the IMF and the EU,” one Greek official said, speaking like others on condition of anonymity. That view was confirmed by sources familiar with thinking in Brussels and Washington.
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“Europe wants more time to see what will happen with Spain and Italy, perhaps even after the German election in 2013,” the Greek official said speaking on conditions of anonymity. “The IMF wants Europe to come up with a comprehensive solution to its problems now.”
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Amid European political wrangling, the Fund, whose biggest shareholders are the United States and Japan and also include the likes of China, Russia and Saudi Arabia, believes a debt restructuring is now essential for Greece to meet its goals – although IMF officials say no formal proposal has yet been made.
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“It is now clear to the IMF that Greece will need more time or more money or both,” a troika official told Reuters.
A senior Greek government official told Reuters, however, that the IMF preferred to see Europeans take losses on some of their previous loans to Athens, blocking any agreement: “The IMF wants an official-sector restructuring but we can’t do that,” the official said. “No one else wants it.”
Participants said tension was high during a meeting between officials from Greece and the troika last week to thrash out an additional 11.5 billion euros worth of savings measures; at one point Stournaras threatened to quit if Poul Thomsen, the Dane who runs the IMF’s relations with Greece, pressed for more cuts.
“Nothing pleases Thomsen any more,” another Greek official said. “Last time the troika was here we agreed 5 to 5.5 billion euros would come from salary and pension cuts. Now we have come up with 7.5 to 8 billion, and they are not enough.”
(Full Article REUTERS)
“Europe wants more time to see what will happen with Spain and Italy,”
exactly what is it that they want to see that they haven’t already seen??? What kind of stupid chess game are they playing??? sheesh!
trying to decode Pythia : how much money Sp & It will need to borrow to get out of their debt mess.
the name of the game is this, “Bleed the countries dry”. This is a game if chicken, who will give in first? Greece, because it has no more money left and the government here will not tell the vultures where to go, or the EU because they either get told where to go or give in and keep the possibility of getting yet more out of the Greek people.
The best thing that could happen right now is that the situation in Spain deteriorates so fast that Spain overtakes Greece as the problem child for Europe. And looking at “The markets”, that seems to be exactly what is happening.
Not something I would want to wish on the Spanish people, or anybody else for that matter, but I do believe that this would force the EU into a complete overhaul and rethink of their disastrous and ridiculous policies.
And as a little bonus, it would quite possible cost Merkel her job. How bad?