The European Economic and Financial Affairs Commissioner Pierre Moscovici warned Greece’s creditors on Thursday not to play with fire over the country’s debt relief programme.
Moscovici’s comments come ahead of the June 15 Eurogroup meeting where all parties hope to strike a deal concerning the Greek programme and the country’s unstastainable debt, despite German resistance.
IMF spokesman Gerry Rice said on Thursday that the International Monetary Fund (IMF) is considering an “approval in principle” for Greece’s programme contingent on resolving the debt issue.
“That would possibly come into play if it proves impossible to reach agreement on financing and the debt relief measures before mid-July, when Greece will need further support from the European Stability Mechanism (ESM) to make some large repayments…there is this option that would enable the IMF to approve a financing arrangement based on the policies that have been agreed but – and this is very important – while making any actual IMF disbursements contingent on creditors agreeing to the debt relief that is necessary to ensure debt sustainability,” he said.
Rice said the IMF hoped that such an agreement will be reached before the next Eurogroup taking place on June 15, which IMF Managing Director Christine Lagarde will be attending.
Rice said that the Fund considers such an approval in principle to be the second-best choice, since “the IMF’s primary objective remains the full package, of reforms plus debt relief,” that will allow the IMF to approve financing for Greece. For this to happen, however, in addition to the legislation of reforms there must also be sufficient clarification of the measures that will be adopted to relieve Greece’s debt that they “add up”, he said.
