World Economy

IMF-Greek Deal Far Off

IMF-Greek Deal Far OffIMF-Greek Deal Far Off

International Monetary Fund Managing Director Christine Lagarde rebuffed Greek government calls to replace top officials overseeing the country’s bailout and said the IMF is “a good distance away” from an agreement that would allow for additional loans to Europe’s most indebted state.

Lagarde’s comments came in response to a letter from Greek Prime Minister Alexis Tsipras, questioning whether the nation can trust some top IMF officials and continue negotiations with them in good faith. His concerns were based on a leaked conference call transcript published by WikiLeaks in which the officials were cited as discussing the possibility of putting pressure on Germany to give Greece debt relief, Bloomberg reported.

The government in Athens said in an e-mail to reporters on Saturday that the leaks show that the Fund has been considering a plan to cause a credit event in Greece and destabilize Europe.

“Successful negotiations are built on mutual trust, and this weekend’s incident has made me concerned as to whether we can indeed achieve progress in a climate of extreme sensitivity to statements of either side,” Lagarde said in a letter to Tsipras released by the IMF on Sunday. “On reflection, however, I have decided to allow our team to return to Athens to continue the discussions.”

 At Loggerheads

IMF has been at loggerheads with auditors from the European Commission over the fiscal measures that the nation must implement in order to meet its budget targets and thus reduce its debt. Germany and other eurozone countries have insisted that the fund will eventually have to get on board for the bailout to proceed, while resisting IMF calls for a deeper Greek debt relief.

In an unusually strongly-worded statement, Lagarde hinted that the Greek government spied on IMF officials and leaked the transcript of the internal call. It’s critical that Greece respects the privacy of the IMF’s internal discussions and ensures the personal safety of its staff, she said.

“The IMF conducts its negotiations in good faith, not by way of threats, and we do not communicate through leaks,” Lagarde said. “Any speculation that IMF staff would consider using a credit event as a negotiating tactic is simply nonsense,” she said.

“Lagarde insists that the leak was not made by the IMF and demands that the IMF be given privacy in Greece, clearly accusing the Greek government of initiating the leak and invading the privacy of the IMF staff in Greece,” according to Nicholas Economides, a professor of economics at the New York University’s Stern School of Business.

Officials from the IMF, the European Central Bank, the European Stability Mechanism, and the European Commission were scheduled to resume negotiations with the Greek government on Monday in Athens on the conditions attached to the country’s latest bailout.