The eurozone’s most hawkish member states have laid out their positions ahead of a discussion on Greece’s bailout progress today, following an escalation in tensions between its creditors in recent weeks.
Slovakia’s finance minister Peter Kazimir, a long-standing critic of largesse to Greece, warned his government would not sign off on major debt relief for the Greek economy which the country does “not need” (see above).
The International Monetary Fund has been pushing EU creditors to afford bold debt restructuring to the Greek economy in order to reduce the country’s 180 per cent debt to GDP pile as its condition to stay involved in the country’s rescue.
But ahead of today’s meeting in Brussels, Mr Kazimir said he was “not willing to pay any price” for the IMF’s continued participation in the €86bn bailout.
Hawkish member states led by Germany and including the likes of Finland, Slovakia and the Netherlands, have opposed writing off large portions of Greek debt which would force losses on their taxpayers.
Wolfgang Schäuble, Berlin’s finance minister, said creditors had only managed to agree a “common position” that would pave the way for bailout monitors to return to Athens later this week.
The German Bundestag approved Berlin’s participation in Greece’s third bailout in five years in the summer on 2015 – with IMF involvement forming a key plank in gaining parliamentary support.
Heading into the meeting, Mr Schäuble insisted “the IMF will be part of this [bailout]“.
But hopes of a major breakthrough have dissipated ahead of the meeting following a fresh stand off between the EU and IMF over the health of the state of the Greek economy which erupted earlier this month.
Michael Noonan, Ireland’s finance minister, said the IMF’s participation in Greece would hinge on a meeting between managing director Christine Lagarde and German chancellor Angela Merkel later this week.
Eurogroup president Jeroen Dijsselbloem said it was his aim to get the IMF financially committed to Greece.
“I am not doing this exercise as Europeans to take the next step without the IMF” he said, adding today’s meeting would focus largely on agreeing the conditions to allow bailout monitors from the EU and IMF to return to Athens.
He said there was no major deadline for an agreement to release fresh cash to the economy as Greece had no “acute” need for money ahead of a major July debt repayments hurdle (see chart below).
“It would be useful for it to happen quite quickly for stability reasons” , added Mr Dijsselbloem, who could be chairing his final Eurogroup meeting as chief should his government fail to be re-elected in Dutch elections next month.