Greece asks for IMF for new bailout loan


Greece invited the International Monetary Fund to participate in its negotiations with European creditors over a vital third bailout – talks that are expected to start next week.

They must conclude before Greece faces another big repayment on August 20, and negotiators are now expected to arrive in Athens over the weekend with talks probably starting on Monday.

The IMF confirmed it had received Greece’s request for a new loan and said it would work to arrange talks with Greece and its European creditors.

Athens is looking to secure yet another bailout – the third since its finances imploded in 2009 – worth €85 billion over three years.
Without the money, the country faces imminent bankruptcy and a probable exit from the shared euro currency.

The letter to the IMF, signed by finance minister Euclid Tsakalotos, formally requests a new bailout from the fund.

That is in accordance with the preliminary third bailout agreement Greece struck with its European partners on July 12, which called for IMF financing and monitoring for Greece from March 2016 – when current IMF financing ends.

The letter said Athens believes it will take “several quarters” before the Greek economy faces up to its challenges “and returns to a vigorous and sustainable path to growth with fairness and social inclusion”.

Greek government spokeswoman Olga Gerovasili said the final third bailout agreement will be brought to Greece’s parliament for approval on August 18.
“Clearly, the negotiations will be constant until then,” she said.

Greece has a debt repayment of around €3.2 billion to the European Central Bank on August 20.

Greece’s five-year financial crisis took a dramatic turn for the worse this summer, after talks between its radical left-led government and the country’s creditors nearly collapsed amid sharp disagreements over the reforms required in return for the rescue loans.

The new bailout was only possible after Prime Minister Alexis Tsipras made a sharp U-turn from years of vehemently opposing further cuts.

Since its first bailout in 2010, Greece’s economy has shrunk by a quarter, while unemployment has rocketed to record peacetime highs and incomes have shrunk an average of 40%.

Much of the pain has been attributed to the income cuts and tax hikes demanded by creditors.

The final hurdle Greece had to clear before talks could restart came early on Thursday when Greek MPs approved creditor-demanded judicial and banking reforms.

Senior Greek banking and finance ministry officials met business leaders yesterday to discuss ways of easing financial transactions, which are being restricted by the capital controls introduced last month.

Banks reopened on Monday after being closed for more than three weeks, albeit for limited transactions. Daily withdrawals at ATMs are still limited to €60 per account holder, and the Athens Stock Exchange has been closed indefinitely.

Yesterday, authorities eased the restrictions slightly, allowing Greeks to take up to €2,000 or the equivalent in foreign currency out of the country per trip.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.