Eurogroup, Greece & the IMF: a new haircut or not?

Posted by in Economy

The Eurogroup meets up on Monday in Brussels with Eurozone finance ministers expected to review individual bailout programs of Eurozone member countries. Greece will also be discussed even as its government is reportedly considering a proposal for a debt turnover
Greek finance Minister Yiannis Stournaras will brief his counterparts about Greece’s progress.
The main issue is, of course, how to cover a funding gap, the possibility a new bailout -that would be the third in 3 years-  and the war between EU/ECB and the IMF over a further debt relief to Greece -that would be the second debt restructuring/haircut -. The European Union under German leadership and the European Central Bank oppose a second haircut, while the International Monetary Fund fully supports one.

The International Monetary Fund chief says she’s confident European nations will meet their commitment to provide further debt relief to Greece if needed.

That’s as long as Greece meets budget targets outlined in its international rescue package.

Christine Lagarde heads the IMF. Lagarde said Thursday the IMF is waiting to see the outcome of measures to raise government revenues before it can determine the size of any shortfall in funding. Measures include tax collection and privatization of state-owned enterprises.

She also says the IMF is ruling out any further austerity measures that would require across-the-board cuts in wages or pensions in Greece.

Lagarde spoke at a news conference in Washington during meetings of the IMF and World Bank. (AP)

More on today’s Eurogroup on Ireland, Spain and the banking union here and Greece here

PS Oh, we are due a bailout injection of 1 billion euro :)