Seeing New Democracy Win, IMF Asks Reforms Not Be Reversed

The National Herald Archive

IMF's spokeperson Gerry Rice. Photo: IMF

The International Monetary, one Greece’s chief creditors, said it wants a pledge from the poll-leading New Democracy not to roll back reforms and austerity measures agreed by the ruling Radical Left SYRIZA-led coalition if the Conservatives win the next elections.

New Democracy chief Kyriakos Mitsotakis - who, as Administrative Reform Minister in a previous coalition fired thousands of workers and back austerity demanded by the country’s international lenders - said he doesn’t anymore and said he would change some of the reforms if he wins.

Prime Minister Alexis Tsipras, reneging on his vows, agreed to the harsh terms of a third bailout, this one of 86 billion euros ($94.58 billion) from the Troika of the European Union-European Central Bank-European Stability Mechanism (EU-ECB-ESM) in return for release of more monies although that requires more pension cuts in 2019 and taxing low-income families.

The IMF, which took part in two first rescue packages of 240 billion euros ($263.94 billion) but has stayed out of the third so far until Tspiras to even more harsh measures, signaled it expected a New Democracy victory in the 2019 elections or if snap polls are held sooner as Mitsotakis wants.

The European Commission will bring down its 2017 growth estimate for Greece, a Eurozone official said, adding that the IMF wants New Democracy to walk away from its pledges and essentially commit political suicide to appease the creditors.

“This is important for them,” the official said of the IMF’s demand, while adding that the Eurozone has not asked for such a commitment, adding that that the EU estimates 2 percent growth for Greece this year and not 2.7 percent the economy is not on target to meet either, analysts said.

Sources told Kathimerini that a downward revision by the Commission of its forecast to 1.9 percent would not lead to a shift in its general estimate regarding Greece’s fiscal course while the IMF estimate is for 2.2 percent growth even though the economy is continuing to shrink because of brutal measures ordered by the government.

Tsipras’ agreement with the Troika means the next bailout installment should take place just before a July deadline to repay the lenders some 7.4 billion euros ($8.14 billion) as little of the bailout monies go to Greek society and most back to the creditors and banks making a killing by charging interest on 326 billion euros ($358.52 billion) in the loans.