Date
27 May 2017
A pensioner holds a banner while demonstrating in Athens during a protest on May 1. The Greek government is striving to clinch a deal that would unlock additional financial aid for the troubled nation. Photo: Bloomberg
A pensioner holds a banner while demonstrating in Athens during a protest on May 1. The Greek government is striving to clinch a deal that would unlock additional financial aid for the troubled nation. Photo: Bloomberg

IMF takes hard line on aid to Greece

The International Monetary Fund (IMF) has warned Greece’s eurozone creditors that Athens is so far off course on its fiscal targets under the bailout program that the nation risks losing additional funding.

Unless European lenders write off significant amounts of Greece’s sovereign debt, new aid could be difficult, the IMF said, according to the Financial Times.

The warning raises the prospect that the IMF may hold back its portion of a 7.2 billion euro tranche of bailout aid that Greece is desperately attempting to secure to avoid bankruptcy, the paper said.

Eurozone creditors, who hold the vast bulk of Greek debt, are adamantly opposed to debt relief. But IMF support is crucial to sustain the Greek bailout.

The IMF believes that Athens is on track to run a primary budget deficit of as much as 1.5 percent of gross domestic product this year.

Under existing bailout targets, Greece was supposed to run a primary surplus of 3 percent of GDP.

“The IMF thinks the gap between the two realities is very large right now,” FT cited a senior official involved in the talks as saying.

Athens, which is resisting new economic reforms, and eurozone creditors will probably fight the IMF on the issue, the person said.

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