BERLIN -
The International Monetary Fund is demanding that Europe free Greece from all
payments on its bailout loans until 2040, in the opening bid of a struggle that
pits IMF math against German muscle.
The IMF wants eurozone countries to accept
long delays in the repayment of Greece’s bailout loans, which would fall due in
the period from 2040 to 2080 under the proposal, according to officials
familiar with the talks. The IMF is also pressing for Greece’s interest rate on
its eurozone loans to be fixed for 30 to 40 years at its current average level
of 1.5%, with all interest payments postponed until loans start falling due.
German leaders are confident that the IMF
will soften its stand, people familiar with the negotiations say. The
Washington-based fund is ultimately controlled by its majority shareholders,
European Union governments and the U.S., who want a deal in the coming weeks that
keeps the IMF on board and Greece afloat. But Berlin officials also know they
will have to offer the IMF major concessions, engaging in a long-delayed debate
about Greece’s debt burden that Germany previously claimed wasn’t needed.
A compromise between Germany and the IMF is
needed by June, when Greece is in danger of running out of money to pay its
bills, and definitely by July, when major debts fall due. If the IMF and
Germany can’t bridge their differences, eurozone lenders might have to continue
lending to Greece without IMF participation-despite German Chancellor Angela
Merkel’s long-standing policy that the Greek bailout is credible only if the
IMF is involved.
The IMF’s proposal on Greek debt-described
by one European official as “hard-core, really”-would keep Greece’s annual
debt-service needs below 15% of its gross domestic product, under the IMF’s
forecast for Greece’s long-term economic trajectory. The numbers are the IMF’s
main weapon in the negotiations, since even the IMF’s board can’t force through
a loan program that IMF staff say doesn’t add up.
Many European policy makers believe the
IMF’s projections are too pessimistic. Berlin officials say IMF staff have
often been wrong in their Greek forecasts before, and are pressing the fund to
be less bleak. IMF staff are under heavy pressure not to be an obstacle to a
deal, people familiar with the talks say.
Eurozone bailout loans to Greece currently
total just over €200 billion ($226 billion), with around a further €60 billion
to come under the latest Greek bailout plan.
Many eurozone officials are open to demoting
the IMF to a technical adviser in the Greek bailout, removing it from lending
and reducing its influence. But Germany, the eurozone’s dominant economic
power, insists that the IMF must say it is prepared to rejoin the program as a
lender. Only then do officials in Berlin want to ask the German parliament, the
Bundestag, to release further bailout funds for Athens.
The IMF stayed on the sidelines last summer
when Europe agreed on a new bailout plan with Greece, citing concerns about the
sustainability of Greece’s debt. Ms. Merkel promised the Bundestag that the IMF
would join the program before Europe’s next disbursement of rescue funds.
The chancellor and many of her conservative
lawmakers believe that, without the IMF, the eurozone wouldn’t be able to
enforce rigorous fiscal and economic overhauls in Greece in return for loans.
The European Commission, which partners with the IMF in overseeing the bailout,
is seen in Berlin as too soft on Greece. Finland and the Netherlands also want
the IMF on board.
Officials in Berlin thus want to make only
limited adjustments to Greece’s loan terms now, and postpone the major changes,
which would need a Bundestag vote, until 2018 -after Germany’s national
elections in 2017.
Germany’s aim in the talks is to arrive at a
formula that assures the IMF that Greece’s debt will be tackled “if necessary,”
based on Greece’s fiscal and economic situation in 2018, while letting Germany
delay final decisions until then.
The IMF’s suggestion that Europe lock in low
interest rates for Greece for decades to come is hard for the eurozone to
digest. The bloc’s bailout vehicles, such as the European Stability Mechanism,
would then need subsidies from national budgets to cover a part of their own
funding costs. IMF staff “like solutions that imply budgetary transfers,” said
a European official.
Given the difficult negotiations, many EU
officials would prefer to lend Greece more money now, without the IMF, and
carry on talking in the fall. But a debt deal would become politically more
difficult as Germany’s election year of 2017 approaches, some participants in
the talks point out. Failure to bring the IMF back on board now could therefore
mean the end of its role as a Greek lender and enforcer of economic overhauls.
That would be a major embarrassment for Ms. Merkel.
Many European officials are hoping for a
deal by the time eurozone finance ministers meet on May 24, allowing a
disbursement soon afterward. But some negotiators believe more time may be
needed.
The IMF is also at odds with eurozone
authorities and Greece’s government over how to ensure Athens hits its budget
targets. But Greece is expected to pass the bulk of the fiscal measures that
creditors want from it by next week. The crucial fight is now among the
creditors. “Greece is basically out of the picture,” says another European
official. “This is a dialogue between the IMF and the countries that really
want the IMF.”
Greece is entering the seventh year of its
troubled bailout still struggling to begin a recovery. The country has largely
closed the gaping budget deficit that triggered its debt crisis. But the
IMF-European bailout—including austerity measures that in total have amounted
to more than 30% of GDP so far—contributed to a 25% decline in the country’s
economic output since before the debt crisis.
Πηγή: wsj.com
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