Athens.- (Reuters, ANA-MPA)
Greece demanded an explanation from the International Monetary Fund on Saturday after an apparent leaked transcript suggested the IMF may threaten to pull out of the country’s bailout as a tactic to force European lenders to more offer debt relief.
EU/IMF lenders will resume talks in Athens on Greece’s fiscal and reform progress next week aiming to conclude a bailout review that will unlock further loans and pave the way for negotiations on long-desired debt restructuring.
The review has been adjourned twice since January due to a rift among the lenders over the estimated size of Greece’s fiscal gap by 2018, as well as disagreements with Athens on pension reforms and the management of bad loans.
Internet whistleblowing site WikiLeaks published what it said was the transcript of a March 19 conference call of three senior IMF officials discussing tactics to apply pressure on Greece, Germany and the EU to reach a deal in April.
The officials were quoted as discussing a threat that the fund might not participate in Greece’s third bailout programme as a way to force EU creditors, especially Germany, to reach a deal on debt relief before Britain’s June referendum on whether to stay in the European Union.
“The Greek Government asks the IMF for explanations whether pursuing the creation of bankruptcy conditions in Greece, just before the British referendum, is the Fund’s official position,” government spokeswoman Olga Gerovasili told state TV.
In his letter, Tsipras addresses Lagarde with hand-written “Dear Christine” and expresses “his deep concern about the positions of IMF officials with key roles in Greek program” and asks whether the positions expressed in the WikiLeaked transcript “reflect the official IMF view.”
PM Tsipras stresses that “using a credit event as a means” to put pressure on Greece and other EU members “is clearly beyond the bounds of the negotiation process”. With reference to the two IMF official, -and primarily Poul Thomsen – The Greek Prime Minister expresses doubts on whether negotiations can continue “in good faith” and “trust” with IMF officials expressing such views.
Christine Lagarde is not currently in Washington.
In the parallel universe of surreal Greece, members of New Democracy insist on knowing who and why bugged the teleconference between Thomsen and Velculescu. They even ask WikiLeaks to name its “source” and point out that some Greek was behind the leaks as the name Poul Thomsen is misspelled, then “everyone who speaks English knows the correct spelling is “PAUL“. Yes, it was one of ND vices who pointed that out – and to think he had negotiated with the IMF & Thomsen when he was Health Minister!!!
An IMF spokesman in Washington said the Fund did not comment on “leaks or supposed reports of internal discussions” but added that the IMF had made its position known in public.
“We have stated clearly what we think is needed for a durable solution to the economic challenges facing Greece – one that puts Greece on a path of sustainable growth supported by a credible set of reforms matched by debt relief from its European partners,” the spokesman said.
“The needed reforms and targets need to be based on credible assumptions. As we have said, there is a tradeoff between what is feasible on reforms and the amount of debt relief needed.”
BLACKMAIL ON GREECE OR GERMANY?
The purported conversation involved Poul Thomsen, head of the IMF’s Europe department, and Delia Velculescu, leader of the IMF team in Greece, and IMF official Iva Petrova.
They discussed whether Greece could apply more austerity as a condition for receiving more aid ahead of big debt repayments in July and voiced frustration at the European Commission’s reluctance to side with IMF pressure on Athens.
They also suggest that Brussels is sticking to unrealistic assumptions about Greece’s budget shortfall to minimize the need for debt relief, which is unpopular with Germany and other northern euro zone hawks.
If concluded the review will unlock a fresh tranche of about 5 billion euros, which Greece needs to pay off state arrears and ECB and IMF maturing debt. Greece has no major debt redemptions due until July.
The Greek government interpreted the leak as revealing an IMF effort to blackmail Athens with a possible credit event to force it to give in on pension cuts which it has rejected.
However the transcript, if genuine, appeared to suggest that Thomsen saw more prospect of the IMF applying pressure on German Chancellor Angela Merkel to concede debt relief to keep the fund involved in the bailout and secure Greek cooperation in managing Europe’s pressing refugee crisis.
“Basically we at that time say “Look, you Mrs Merkel you face a question, you have to think about what is more costly: to go ahead without the IMF, would the Bundestag say ‘The IMF is not on board’? or to pick the debt relief that we think that Greece needs in order to keep us on board?” Right? That is really the issue,” Thomsen was quoted as saying.
Greece hopes for a compromise before April 22, when euro zone finance ministers are to assess its progress.
EU officials have cited progress in talks but have also cautioned that there is still a long way before the review is wrapped up. (Reuters)
President of Republic Prokopis Pavlopoulos had a phone contact on Saturday with Prime Minister Alexis Tsipras.
According to government sources, Pavlopoulos noted that he as he has stated he believes that “from the moment the European Union and the eurozone have formed the ESM, it should have assumed IMF’s mission and responsibilities (in the Greek programme) a long time ago. ESM’s officials know-how is much better that the IMF’s officials” he said.
On his part, Tsipras underlined that “Greece meets its commitments and will ask for explanations from the IMF. I will brief the country leaders and institutions on our positions. We must not allow to anyone to play with fire and we will not leave the country and Europe unprotected. Some want to bring a new crisis in Greece and to affect the British referendum and to wound Europe”.