Die Zeit reports on Thursday that an extension of the bailout program until the end of the year will be offered by European creditors to the increasingly isolated Tsipras government, but without the IMF’s participation.
Nevertheless, hours later the report was reportedly dismissed by EU diplomats, according to Reuters, which used the phrase of it (report) has “nothing to do with reality … such a proposal would definitely not fly”.
The Die Zeit article, bylined by Mark Schieritz, said creditors want to stave off a possible Greek default, given that the current bailout program ends on June 30 with 7.2 billion euros left over. It’s that tranche of ‘soft loans’ that Greece and its creditors have been negotiating over, unsuccessfully, for more than four months.
Funding in the bailout extension will come from 10 billion euros in cash intended for bank capitalization of Greek banks, from the ESFS fund. Using the funding would allow Athens to repay the IMF and ECB on time this summer,.
According to Die Zeit, the IMF would no longer participate in the funding scheme for Greece, given that the Fund does not believe Athens fulfills conditions for continued funding, i.e. the size of the debt.
The tabloid also claims that a third bailout plan would follow the extension, with IMF participation contingent on a debt restructuring for Greece.
Ask me anything
Explore related questions