Greek developments: IMF participation in Greece's rescue questionable
While the details of the third Greek bailout are currently discussed in Athens, International Monetary Fund (IMF) could be ready to pull out of negotiations.
As the Financial Times has reported, IMF said Athens' high debt levels and poor record of implementing reforms disqualify Greece
from a third IMF bailout, spurring concerns over
whether the institution will join the EU's latest financial rescue.
The determination, presented by IMF staff at a two-hour board meeting Wednesday, means that while IMF staff will participate in bailout negotiations currently under way in Athens, the Fund will not decide whether to agree a new program for months – potentially into next year.
That delay could arouse echoes – particularly in Germany, where policy makers have been saying it would be impossible to win Bundestag approval for the new €86bn bailout without the IMF on board.
Many analysts agree that debt relief is essential for successful completion of the third bailout.
"A debt write-off is absolutely necessary for the Greek economy to stand any chance of a full recovery. Unfortunately, the worsening economic climate has made it even less likely that Greece will be able to meet the budget targets required to pass future reviews," said European economist at Capital Economics, Jessica Hinds.
Michael Hewson, chief market analyst at CMC Markets, commented Friday that the IMF move "will make it extremely difficult to agree on any form of bailout package in the time allotted simply because Germany has insisted that the IMF has to be involved, which seems rather bizarre, given that of all the countries involved it is Germany who opposes the concept of any form of debt relief the most."
