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There can be no memorandum without the IMF

09 January 2016 / 15:01:19  GRReporter
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Eurogroup President Jeroen Dijsselbloem was adamant on the IMF's participation in the third Greek programme. He emphasised there could be no memorandum without the IMF and thus sent a clear message to Athens. It was prompted by the multiple statements of the Greek Prime Minister on the IMF's participation in the memorandum after 30 March. Meanwhile, European officials, such as Klaus Regling, Chief Executive Officer of the European Financial Stability Facility (EFSF), have argued that the IMF's role is advisory, and the Fund is no longer such an important creditor.

Greece would rather see the IMF out of the programme because of the higher interest rates on its lending and also its intransigent position on various negotiation issues.

Asked about the IMF's role, Dijsselbloem pointed out that while the Fund may not be officially involved at this stage, it is in practice. According to him, the IMF intends to return to a more active role in the Greek bailout as long as its demands are met, e.g. a serious reform of the pension system and guaranteeing the debt's sustainability.

"The IMF intends to return to the programme not only as a technical consultant, but to take part in the financing as well," said Dijsselbloem. Along with this, he argued that the first evaluation of the programme will last months rather than weeks. Dijsselbloem also said that the Greek proposal for pension reform will be discussed first at the institutional level, and then by the Eurozone finance ministers.

Dijsselbloem spoke at a press conference in Amsterdam as the Netherlands is taking over the EU presidency.

The Dutch Finance Minister said that the pension system reform is a precondition for the completion of the first review. It will cover many topics, on which the Greek government and the institutions must reach an agreement. Difficult negotiations are forthcoming over the sale of mortgage and consumer loans to special funds.

A positive outcome of the review will lead to further disbursements, tranches for Greece, Dijsselbloem stressed. Only when this process is completed, a discussion on debt relief might be in order.

"We have to be realistic. I would like to speed up the procedure, but, unfortunately, I don't have this opportunity. I would like us to hurry, but we can't: we are talking about months rather than weeks," he added. The Greek government wants the evaluation to begin in mid-January and be completed by late February.

As far as bank recapitalization is concerned, Dijsselbloem said it had taken 20 billion less than the initial estimates, and this implies a reduction of the final amount of €86 billion, which was earmarked with the third memorandum.

Tags: Jeroen Dijsselbloem IMF review memorandum Eurogroup
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