Greece’s creditors stand united on IMF involvement and debt

Recent statements

IMF

International Monetary Fund (IMF) representative Delia Velculescu is the only person clearly speaking about a haircut to Greek debt.  Speaking at an investment conference in New York on Monday she clearly pointed out that a reduction was needed to make the debt viable though she also pointed to the need for additional reforms on social security and the pension system.

Germany

German Chancellor Angela Merkel gave her “wholehearted thanks” to German Finance Minister Wolfgang Schaeuble for his role in the Greek crisis during the annual conference of the Christian Democrats (CDU) party. She singled out the minister by stating that the negotiations were a “crucial test for us and the eurozone as a whole” and pointed out that the German finance minister played a decisive role by constantly pressing for a program based on the criteria that were important for Germany, ie. no aid without conditionality.

ESM

On his part, European Stability Mechanism (ESM) chairman Klaus Regling stated that the IMF hhas both a financial contribution and monitoring role in Greece according to the July 86-bln-euro bailout agreement. He pointed that Grexit is still on the table unless Greece implements necessary reforms so that partners can provide the financing needed for Greece to return to a sustainable economic situation. Furthermore, he made it clear that debt negotiation cannot begin in December as Prime Minister Alexis Tsipras had hoped but would need to be postponed.

Eurogroup

The Eurogroup Working Group President Thomas Wieser made it clear in an interview with daily Kathimerini newspaper that there is “no chance that the first review will conclude without the IMF.”

European Commission

Declan Costello, the European Commission’s Mission Chief in Greece, was also present at the New York City conference on Monday and expressed his positive surprise in the lower-than-expected shrinking of the Greek economy in 2015, hearalding potential growth in 2015. He noted that the first review of the Greek program would begin at around mid-January and its successful conclusion would mark a step forward and positive sign for stability in Greece. Still, he said that though there is progress it’s still not good enought to “restore competitiveness, to regain market share to redevelop the export trade part of the economy.”

 

ECB

Ramus Ruffer, the ECB’s Mission Chief to Greece, pointed out that debt relief is something that each of the union’s member states will have to discuss.