Sat, May 28, 2011 - Page 10 News List

IMF presses Greece on financing plans


The IMF warned Athens on Thursday to firm up its broad financing plans and policy actions to be able to continue receiving IMF bailout funds in concert with the EU.

With Athens warning it will go bankrupt without the next 12 billion euro (US$17.1 billion) installment from a joint IMF-EU rescue program, IMF spokeswoman Caroline Atkinson said the fund needed “assurances” on how the country will fund its future to continue giving it support.

Atkinson stressed that the IMF’s total 30 billion euro loan package for Greece is contingent on the the country being able to obtain ongoing financing from other sources and operations.

“We are certainly focusing on what can be the next steps for the economic program in Greece,” she told reporters. “And so we look for — our technical term is financing assurances. We have to ask for financing assurances in every program.”

She referred both to the much larger EU rescue for Greece, to its fiscal policy adjustments and to its pledge to begin selling assets to raise funds.

“Our executive board does not ever let us lend when we don’t have an assurance ... when we haven’t assured ourselves that there will be no gap,” she said. “It’s important that we at the IMF put in money when we have worked with a country to take steps to close the gap and when we’re seeing that other financing is available. That is how we maintain the safety of our members’ money.”

Luxembourg Prime Minister Jean-Claude Juncker, who heads the eurozone finance ministers, said on Thursday that the IMF may block the next installment of the joint program.

Juncker said the fifth tranche in a 110 billion euro loan package could be hampered by IMF rules forbidding the lender of last resort to release funds without a 12-month guarantee of solvency.

“There are specific IMF rules and one of those rules says that the IMF can only take action when the refinancing guarantee is given over 12 months,” Juncker told a conference in Luxembourg.

An IMF team is currently in Athens discussing its progress before releasing the fifth tranche of the program.

Atkinson said the IMF was aware of the challenges Greece faces and the deterioration of its situation — in part because of the snowballing of Europe’s financial troubles into Ireland and Portugal.

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