Spokesman of International Monetary Fund, Gerry Rice, dismissed a New York Times report the Fund was split over its participation in the Greek program.
Rice categorically denied there was an internal division within the Fund on how to approach the Greek program.
The spokesman recalled that the IMF has been funding the Greek bailout program since 2010, it has repeatedly expressed concerns over the sustainability of the Greek debt and the high primary surpluses set as targets by Greece’s European creditors.
According to article “IMF torn over whether to bail out Greece once again” published by New York Times on Saturday, as the International Monetary Fund approaches the seventh anniversary of the contentious Greek bailout, it is torn over whether to commit new loans to a nearly bankrupt Greece.
For more than a year, I.M.F. officials have been saying — loudly — that they cannot participate in a new rescue package for Greece unless Europe agrees to ease Greece’s onerous debt burden.
The fund’s reluctance to commit additional money to Greece also highlights a widely held view among I.M.F. officials — and in the Trump administration — that the fund overextended itself in Greece. They also see the responsibility for restoring the country’s economic health as resting primarily with Europe, which is currently covering 80 percent of Greek debt.
In many ways, the situation in Greece has become an existential question for the I.M.F.
The fund has been criticized for overcommitting financial resources to the European debt crisis.
For example, the €30 billion the fund lent to Greece in 2010 was 30 times more than the sum of Greece’s financial contribution to the fund as a member, which is called a quota. The loan is one of the largest in the history of the fund, which was formed in 1944.
Yet the I.M.F. has an obligation to lend to countries that are in financial need as well as to safeguard global financial stability.
“This is where it gets especially fraught,” said C. Randall Henning, a specialist on global financial institutions and governance.
“The fund is digging in its heels, but if the pattern of brinkmanship that the Europeans and the Greeks have practiced in the past prevails, you will see more instability in the markets,” he said. “This is definitely creating anxiety — both within the fund and within national governments.” (full article in NYT)
PS I suppose the IMF will find the answer to the crucial Hamletian To Fund or Not To Fund question, when creditors return to Athens upcoming Tuesday (Apr 25/2017) to continue talks about the second review.
