World Economy

Greece Accepts IMF Role in Third Bailout

Greece Accepts IMF Role in Third BailoutGreece Accepts IMF Role in Third Bailout

Greece has ‘fully accepted’ that the IMF take a role in its third bailout program, according to head of the Eurogroup Jeroen Dijsselbloem. Athens had previously claimed the Fund’s involvement was no longer necessary.

As Jeroen Dijsselbloem arrived in Brussels for a meeting of eurozone finance ministers on Thursday, he said that he had received assurances from Greece’s finance minister that the International Monetary Fund would take a role in the €86 billion ($92 billion) rescue program, DW reported.

Dijsselbloem told reporters that Finance Minister Euclid Tsakalotos confirmed to him that the Greek government accepts that the IMF needs to be part of the process. Dijsselbloem added: “It was absolutely clear to him, it was part of the agreement this summer.” In December, Greek Prime Minister Alexis Tsipras said the participation of the IMF in Greece’s third bailout since 2010 was not necessary. He claimed that the program could be handled by eurozone authorities alone.

Germany, which has played a major role in Greece’s financing, said the IMF must be involved in any bailout. There were suggestions that Berlin analysts considered that if the European Commission alone represented creditors, it might be too lenient towards Athens in terms of the implementation of reforms.

The IMF is believed to want Athens to implement major pension reforms and for the eurozone to agree to re-profile Greek debt to cut its net present value. “To get the IMF on board, they have been very clear they want a deep and thorough pension reform, a solid budget, fiscal issues to be addressed and they want a sustainable debt, and then they will step back in,” Dijsselbloem said.

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Last week Greece submitted its pension reform plan to Brussels. “It’s a serious proposal,” Dijsselbloem said. “The key question is whether in terms of financial sustainability it all adds up,” he added. Dijsselbloem is also Dutch finance minister.

Only after eurozone ministers give Athens their approval for a package of reforms agreed under the bailout will debt relief talks begin. They will focus on loan maturities, grace periods and a reduction in interest rates.

Called the “conclusion of the first review,” the eurozone ministers’ approval could come in February, but Dijsselbloem suggested, “It would rather be months than weeks.”

The IMF’s spokesman on Thursday said via Twitter there was no “exact date of mission return to Athens.” Next week, officials from Greece’s creditors in the European Commission, European Central Bank, IMF and the ESM European bailout fund are to return to Athens to monitor adherence to the terms of the bailout program.