Greece Denies Leaking Damning IMF Bailout Threats, Tsipras Furious

ATHENS – Greece’s beleaguered Radical Left SYRIZA-led coalition said it was not behind a leaked transcript that showed International Monetary Fund envoys discussing tough terms of a third bailout amid stalled negotiations over more austerity measures.

The embarrassing revelations came when Wikileaks released publication of a transcript of an apparently secretly recorded telephone conversation between IMF officials discussing the Greek bailout.

“Greece has no reason to leak or wiretap (conversations,),” Deputy Defense Minister Dimitris Vitsas said. It wasn’t said why someone in the defense ministry and not a higher official had spoken about the transcript that set off a firestorm in the government and led Prime Minister Alexis Tsipras to complain to IMF Managing Director Christine Lagarde.

“The most well-protected people in the country at the moment are the members of the negotiating team,” Vitsas said, Kathimerini reported, of envoys from the Quartet of the European Union-IMF-European Central Bank-European Stability Mechanism who are forced to operate out of the Hilton Hotel and meet Greek representatives there.

“We provide them with the best possible treatment,” said Vitsas, not someone from the Finance Ministry or Tsipras’ office,

Lagarde rebuked the government and said in a letter to Tsipras that the government should “ensure an environment that respects the privacy of their internal discussions and take all necessary steps to guarantee their personal safety.”

With Greece desperate for money and the lenders holding back much of a third rescue package, this one for 86 billion euros ($97.72 billion) since last August because of a logjam over pension cuts and other undone reforms, Lagarde said the two sides are still far away from reaching a resolution.

“We are still a good distance away from having a coherent program,” Lagarde said in the letter, responding to his letter in which he stated his unhappiness IMF officials were suggesting an “event” – likely prospect of a Greek default – would be what it would take for the EU to provide debt relief.

The IMF has said that the other lenders give Greece a break but the Washington-based institution said it won’t and wants repayment in full of what it has lent as part of three bailouts of 326 billion euros ($370.44 billion) since 2010.

According to the leaked text, the officials suggested the IMF may threaten to pull out of the country’s bailout as a tactic to force EU lenders to offer more debt relief.

The alleged transcript documented a March 19 conference call between three senior IMF officials discussing tactics to apply pressure on Greece, Germany and the EU to reach a deal on the unfinished bailout review in April.

“We can only support a program that is credible and based on realistic assumptions, and that delivers on its objective of setting Greece on a path of robust growth while gradually restoring debt sustainability,” Lagarde said.

Tsipras asked for clarification on whether the IMF was trying to force Greece toward bankruptcy, or a “credit event,” so an agreement between lenders could be reached on the country’s bailout.

“Any speculation that IMF staff would consider using a credit event as a negotiating tactic is simply nonsense,” responded the IMF chief.

“The IMF conducts its negotiations in good faith, not by way of threats, and we do not communicate through leaks,” Lagarde said in the letter.