IMF

The International Monetary Fund’s board on Thursday approved a $1.8 billion loan to Greece – but will only release the money if the country gets debt relief from its European creditors.

The IMF has praised Greece for taking steps to reduce its budget deficits, including expanding its tax base and cutting spending on pensions. But the lending agency is pressuring Greece’s eurozone lenders to provide enough relief to ensure the battered country can pay its bills.

The International Monetary Fund, a key creditor in Greece’s bailout, will not participate in any further rescues of the debt-wracked country, Germany’s finance minister Wolfgang Schaeuble told a Greek newspaper today.

“We have all acknowledged (eurozone and IMF) that the third Greek (bailout) payment will be the last with the participation of the IMF,” Schaeuble told Greek daily Ta Nea.

Greece’s international lenders prepared on Thursday to unblock as much as €8.5 billion in loans that Athens desperately needs next month to pay its bills, and to give some idea of what debt relief they may offer over the long-term.

One of the reasons why Greece’s bailout program has stalled over the past few months has been a disagreement between the eurozone and the International Monetary Fund on debt relief. The IMF, which has contributed financially to Greece’s first two bailouts but not the third, has wanted more information about what debt relief Greece may get before it gets more involved in the current program, which is due to end in the summer of next year.

Greece’s parliament has approved a new package of austerity measures needed to release the next instalment of its multi-billion-dollar bailout, as angry demonstrators protested outside parliament against the new round of austerity.

The measures, which entail $5.4bn in cuts to be implemented in 2019 and 2020, were backed late on Thursday by all 153 members of parliament in Prime Minister Alexis Tsipras’ ruling coalition after a fiery debate.
The legislation was backed by all 153 deputies in Prime Minister Alexis Tsipras’ left-led coalition. All 128 opposition lawmakers present in the 300-member parliament stood against the measures in a vote just before midnight.

Greece has reached a preliminary deal with its creditors that should pave the way for long-awaited debt relief talks, the Greek finance minister said Tuesday. “The negotiations are concluded,” Euclid Tsakalotos told reporters, according to state agency ANA. After overnight talks, Tsakalotos said a “preliminary technical agreement” had been achieved ahead of a May 22 meeting of eurozone finance ministers, which is required to approve the deal.

Talks on the deal, which includes labour and energy reforms as well as pension cuts and tax rises, had dragged on for half a year mainly due to a rift between the European Union and the International Monetary Fund over fiscal targets.

Christine Lagarde, the chief of the International Monetary Fund, called on governments and businesses to do more to promote the same economic opportunities for men and women and to fight discrimination that interferes with those goals.

In September, the main focus was once again the central banks, the ECB first of all, then the Bank of Japan and the Fed. Expectations were high in all three cases. To announce additional monetary easing in the first two, and guidance on anticipations and credibility in the third. The first two disappointed the market, announcing measures that fell well short of investor anticipations. Already in July, the BoJ opted to keep things as they stood even though a large proportion of investors expected to see further monetary easing. The Fed, for its part, struggled to overcome internal divisions and look beyond a month-by-month horizon, at the risk of making mistakes in its growth projections and damaging its credibility.

The International Monetary Fund (IMF) will not join the Greek bailout program but will accept a special role as advisory status with limited powers, according to Reuters’ sources. “A special advisory status with limited powers that keeps IMF at the table”, looks like the most possible scenario, Reuters reporting two senior sources.