The EU said today that the International Monetary Fund’s calls for debt relief for Greece are “fully compatible” with the agenda in Brussels for negotiating a third Athens bailout.
The IMF said yesterday that it would only join a new multi-billion euro rescue programme once Greece and the EU agree on conditions for medium-term debt sustainability, including possible debt relief and economic reforms.
“It is clear the IMF has a different set of procedures and a different timetable,” said Mina Andreeva, spokeswoman for the European Commission, the executive arm of the 28-nation European Union.
“It is a two-stage process and this is line with what was discussed at the (July 12-13 eurozone) summit and the resulting statement, and is also fully compatible with the EU agenda,” Andreeva told reporters in Brussels.
The EU aims to conclude negotiations for a third bailout “with the expertise of the IMF, and then to consider debt measures later in the year,” she added.
Athens and Brussels hope the terms of the new bailout can be finalised by mid-August, with cash-strapped Athens facing a 3.2 billion euro repayment to the European Central Bank on August 20, and a 1.5 billion euro reimbursement to the IMF the following month.
Greece has signed up to tax hikes, a pension overhaul and privatisations that the 19-country eurozone demanded at the summit in return for the new bailout.
Experts from the EU, the ECB and the Washington-based IMF have been in Athens this week to discuss the bailout which could be worth up to 86 billion euros (USD 95 billion) over three years.
In an interview on Wednesday, Prime Minister Alexis Tsipras said Greece could expect debt relief from its creditors once the experts’ assessment of its reform commitments is made in November.
The IMF said earlier it could not join in the bailout unless there was “dramatic” relief on Greece’s debt to ensure its finances are “sustainable” over the long run.
The IMF was part of two rescue packages for Greece in 2010 and 2012 worth 240 billion euros, plus another 100 billion euros debt write-down for private sector creditors.
Germany, the single biggest creditor, has led opposition to any such “haircut” for the governments and EU institutions which now hold much of Greece’s debt.