IMF Will Join Third Greek Bailout, Take Lesser Role

Αssociated Press

IMF Chief Christine Lagarde. (AP Photo/Francois Mori)

ATHENS - The International Monetary Fund is reportedly ready to join a third bailout for Greece but with far smaller loans than expected.

The IMF, which took part in two first rescue packages of 240 billion euros ($254.75 billion) along with the European Union and European Central Bank, has stayed out of the third, for 86 billion euros ($91.28 billion) as the European Stability Mechanism jumped in.

Greece’s European partners said without the IMF, which is calling for more austerity but also debt relief – from Europe only – that the bailouts would collapse.

Europe had expected 16 billion euros ($16.98 billion) from the IMF but the Washington, D.C-based agency is willing to put in only five billion euros ($5.31 billion), the German newspaper Der Spiegel said.

Germany is the biggest contributor to the bailouts but also the harshest taskmaster in demanding, and getting, Greek governments to impose big pay cuts, tax hikes, slashed pensions and worker firings.

The newspaper said the IMF reportedly now shares the view by European creditors, namely, that Greece must achieve primary budget surplus targets of 3.5 percent of GDP after 2018, instead of 1.5 percent as previously proposed by the agency.

The Eurozone on Feb. 20 will take up Greece’s case again as Prime Minister and Radical Left SYRIZA leader Alexis Tsipras is hoping for release of more monies from the third bailout even though he has reneged on promises to impose more tough conditions, just as he did after campaigning against austerity but implementing them anyway.