07-17-2015, 10:37 PM
What happens if the IMF walks away you ask? Well, the entire "deal" could fall apart, as the Fund is expected to put up a not insignificant portion of the bailout money, and in the absence of that funding, the gap would have to be filled with "privitization proceeds" which the IMF itself has projected will come to just €2 billion over the next three years. Furthermore, German lawmakers, already exasperated with the protracted negotiations, would likely pull their support altogether.
IMF May Walk Away From Greek Bailout | Zero Hedge
In addition, an EU official said that of the €86bn in Greek financing requirements, the European Stability Mechanism — the eurozone’s €500bn bailout fund — was expected to put up only €40bn-€50bn. The current IMF programme, which still has €16.4bn in undisbursed funds and runs through March 2016, is expected to make up some of the difference, and eurozone officials had been assuming a follow-on IMF programme would contribute as well.
IMF May Walk Away From Greek Bailout | Zero Hedge
The IMF said the Europeans will either have to offer a “deep upfront haircut” or slash the debt burden by stretching maturities and presumably by lowering interest costs. “There would have to be a very dramatic extension with grace periods of, say, 30 years on the entire stock of European debt,” it said. Debt forgiveness alone would not be enough. There would also have to be “new assistance”, and perhaps “explicit annual transfers to the Greek budget”.
IMF stuns Europe with call for massive Greek debt relief - Telegraph
This is the worst nightmare of the northern creditor states. The term "Transfer Union" has been dirty in the German political debate ever since the debt crisis erupted in 2010. The underlying message of the report is that Greece is in such deep trouble that it cannot withstand further austerity cuts. This is hard to square with the latest demands by EMU creditors for pension cuts, tax rises, and fiscal tighting equal to 2pc of GDP by next year. Nobel economist Paul Krugman said the cuts are macro-economic "madness" in these circumstances.
IMF stuns Europe with call for massive Greek debt relief - Telegraph
As U.S. Treasury Secretary Jack Lew jets into Europe to urge policymakers to keep the Greek rescue on track, there are fears that the International Monetary Fund has derailed country's third bailout.
IMF debt relief call for Greece risks bailout
"If Germany wants the IMF on board it looks like it will have to give a lot more ground on debt relief or risk the agreement with Greece falling apart," Jasper Lawler, market analyst at CMC Markets said in a note Wednesday.