IMF won’t join Greek bailout before reforms, debt relief

The senior official said Thursday that it was already understood that detailed plans for debt relief would not come for some months during the current first stage of developing the new plan.

The party members were meeting to settle differences over whether the government should accept a third bailout from its global creditors.

According to the Financial Times, the Fund will be able to decide whether Athens is eligible for more IMF financing after Greece’s Eurozone money lenders have agreed on debt relief for the cash-strapped nation. The official spoke on condition of anonymity.

IMF staff told the fund’s executive board on Wednesday that Greece doesn’t now qualify for a loan, the Financial Times reported Thursday, citing a confidential summary of the meeting.

“The IMF’s position on debt sustainability is not new”.

At the early stages of the Greek crisis, the IMF waved the debt criteria because of rules allowing it to grant a bailout if there was “a high risk of worldwide systemic spillover”.

Bailout negotiations were launched in Greece this week, and have so far largely focused on tax reform, a planned overhaul of labor market regulations, and efforts to simplify bureaucracy for new businesses, as well as attempts to limit an expected recession through 2016.

“The representatives of the four institutions will meet on Friday at 10 a.m. with (Finance Minister) Euclid Tsakalotos and (Economy Minister) George Stathakis”. The fund has said Greece’s debts are likely to rise to 200 percent of its economic output in the next two years, a burden the fund calls unsustainable.