The International Monetary Fund (IMF) mission chief for Greece will not be joining the other representatives of creditor institutions.
The IMF can’t consider a third bailout until Greece asks for one, and Athens so far has yet to submit a request. Also, he said the IMF must first do a detailed assessment of the country’s finances and economy before it can begin finance negotiations said Gerry Rice, the IMF’s top spokesman, in a regular press briefing.
Representatives of the other institutions, the European Commission and the European Central Bank (ECB), as well as the European Stability Mechanism (ESM) are due to arrive in Athens on Friday to begin discussions on a third bailout worth up to 86 billion euros over three years.
The financial spigots for Greece will open only after the bailout agreement is finalized and Athens carries out the policy changes demanded by the creditors such as enacting deeper austerity measures, including pensions cuts and tax increases for farmers.
But the IMF, which took part in the first two rescues has conditioned its participation in the new plan on the other official creditors reducing the country’s debt burden to make its finances “sustainable”.
Rice said Thursday the fund’s participation in the new bailout is contingent on a balanced approach that includes both Greek reforms and a commitment to the required financing. “We’ve said pretty clearly that debt relief is required,” he said.
The monetary fund recommended either a “very dramatic extension” of payment deadlines by up to 30 years or “deep upfront haircuts,” banker jargon for write-offs.
The issue of debt restructuring is a contentious one, with Germany in particular opposing such a step as incompatible with euro zone membership.
On the Greek side, the president of the Council of Economic Advisors (SOE) Professor Giorgos Chouliarakis, who teaches at the University of Manchester, will lead the negotiations with bailout monitors. Nevertheless the IMF requires direct contact with ministers and not technocrats to participate in the talks.
