Biodun Iginla, BBC News

Biodun Iginla, BBC News
Showing posts with label imf. Show all posts
Showing posts with label imf. Show all posts

Saturday, April 2, 2016

Greece challenges IMF over 'debt transcript leak'


  • 30 minutes ago

by Elodie Bagnol and Biodun Iginla, BBC News, Athens
A Greek and EU flag are waved in AthensImage copyright EPA
Image caption Hard-fought talks over Greek debt between Athens, the EU and IMF brought a deal last year
Greece has demanded an explanation from the IMF over a leaked conversation in which top officials allegedly discuss the Greek bailout.
A transcript, published by Wikileaks, shows the officials discussing ways of putting pressure on Greece, Germany and the EU to get them to wrap up talks.
One of those quoted suggests a crisis "event" may be needed to force a conclusion.
Further negotiations between Athens and its lenders are due next week.
Last year Greece agreed a multi-billion dollar bailout with the EU and IMF that was needed for the country to avoid bankruptcy and stay in the eurozone.
Greek debt: What's the deal?
Debt jargon explained
The Wikileaks conversation purportedly involves Poul Thomsen, head of the IMF's Europe department, and Delia Velculescu, leader of the IMF team in Greece, the senior officials in charge of Greece's debt crisis.
Mr Thomsen is quoted as complaining about the pace of talks on reforms Greece has agreed to carry out in exchange for the bailout.
"What is going to bring it all to a decision point?" he asks.
"In the past there has been only one time when the decision has been made and then that was when they were about to run out of money seriously and to default."
Mr Velculescu later agrees "we need an event, but I don't know what that will be".
Migrants hold a protest in GreeceImage copyright AFP
Image caption One official expresses surprise a deal has not yet been reached amid a pressing migrant crisis
Mr Thomsen also appears to suggest the IMF could pull out of the bailout to force German Chancellor Angela Merkel to agree to debt relief.
Such a move could be politically difficult for Mrs Merkel, the key figure in the crisis.
"Look..., Mrs Merkel, you face a question, you have to think about what is more costly: to go ahead without the IMF, would the Bundestag say 'the IMF is not on board?' or to pick the debt relief that we think that Greece needs in order to keep us on board? Right?" Mr Thomsen says.
He adds that, if Greece were to default, talks could be further delayed by Britain's referendum on EU membership.
The IMF would not comment on the purported leaks but said its public position on the matter was clear.
Former Greek finance minister Yanis Varoufakis said: "As WikiLeaks revealed today, the IMF is planning to stall until July to bring Greece to its knees [again!] in order to force Angela Merkel's hand.
"It's time to stop Greece's fiscal waterboarding by an incompetent, misanthropic troika."

Greek debt crisis

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Saturday, August 15, 2015

Greece crisis: IMF calls for Greek debt relief after bailout approved

by Isabelle Roussel and Biodun Iginla, BBC News, Brussels

34 minutes ago


The International Monetary Fund has called on eurozone ministers to offer Greece debt relief, following the approval of a new bailout deal.
Greece will receive up to €86bn (£61bn) in loans over the next three years, in return for tax rises and spending cuts.
IMF chief Christine Lagarde welcomed the agreement, but warned Greek debt had become unsustainable.
She said the country needed significant relief "well beyond what has been considered so far".
"Greece cannot restore debt sustainability solely through actions on its own," she added.
The BBC's Adam Fleming in Brussels says finance ministers will consider possibly writing off some of the country's debts in the autumn.

The first tranche of loans will be for €26bn.
This will include €10bn to recapitalise Greek banks and €16bn in several instalments - the first of which will be for €13bn and will be delivered in time for Greece to repay about €3.2bn to the European Central Bank (ECB) by 20 August.
European Commission President Jean-Claude Juncker said the deal sent a message "loud and clear" that Greece will stay in the eurozone.
It comes at a political cost for Greek Prime Minister Alexis Tsipras, who has faced a rebellion in his left-wing Syriza party.
More than 40 MPs voted against him when parliament decided on the bailout agreement on Friday, after all-night talks. He managed to push it through with the help of members of the opposition.
Dutch Finance Minister Jeroen Dijsselbloem, who chaired the Eurogoup meeting where the deal was hammered out, said he was confident it would "address the main challenges facing the Greek economy".
He acknowledged that dealing with debt was an important issue, especially for the IMF, but Germany has so far been vehemently against any debt "haircut" that would cost creditors billions of euros.
German Finance Minister Wolfgang Schaeuble told Deutsche Welle radio: "Outright debt forgiveness doesn't work at all under European law."
Mr Schaeuble added that there was "a certain amount of room to extend maturities further", but cautioned: "His room is not very big."
Germany's parliament is to hold a special session on Wednesday to decide on whether to approve the Greek bailout.
Third Greece bailout: What are eurozone conditions?

Greek debt crisis

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Tuesday, July 14, 2015

Greece debt crisis: IMF attacks EU over bailout

by Isabelle Roussel and Biodun Iginla, BBC News, Athens/Brussels

2 hours ago


The International Monetary Fund has attacked the bailout deal offered by eurozone leaders to Greece.
The creditor said Greece's public debt had become "highly unsustainable" and it needed relief from its debts.
The BBC's economics editor Robert Peston said the criticism was savage. The IMF suggested options including writing down the debt - a move most fiercely resisted by creditors.
The Greek parliament must pass four pieces of legislation on Wednesday.
It is the first requirement of the deal offered after hours of negotiation in Brussels on Monday.
A slogan in front of the Greek parliament reads 'Here lies Syriza, the party I once supported'
The measures - which face resistance from Prime Minister Alexis Tsipras' own MPs - include taxation increases and pension curbs.
Greece owes about 10% of its debt - €1.6bn (£1.1bn) - to the IMF.
It has missed two deadlines for repayment to the fund and is the first EU country ever to do so.
The BBC's economics editor says the IMF's assessment makes it much harder for Mr Tsipras to persuade the Athens parliament to back the measures needed in Wednesday's votes.
It brings into question the validity of the reform measures demanded by the eurozone and endorses the kind of debt write-offs the Greek public have been arguing for, he adds.

Analysis: Robert Peston, BBC News, Economics editor

Why on earth should Greek MPs vote for a painful economic reform package which the IMF - the supposed global arbiter of these things - does not believe will put the country back on the path to prosperity?
The eurozone creditors, and Germany in particular, forced Alexis Tsipras - against his strong preference - to accept IMF participation in the next formal bailout package to be negotiated if Greek MPs pass the initial reform measures tonight.
They told him, in effect, he would be turfed out of the eurozone and into national ruin unless he took more of the IMF's money and fiscal bossiness.
Which also look tragically comic tonight - with the IMF saying that if it's all the same to Mrs Merkel, it would rather not touch Greece with a barge pole.
Or to be tediously literal, the IMF has made it clear that it does not wish to participate in any further Greek bailout, unless Germany and the rest drop their vehement opposition to big write-offs of Greek debt.
Which should be music to the ears of Mr Tsipras, except that presumably he would quite like his creditors to agree among themselves, before presuming to tell him how to run his own shop.
Has IMF blown up Greece rescue?
The IMF said it regarded forecast rates of growth for Greece as unrealistically high.
Its analysis released on Tuesday night pointed to Greek government debt reaching a peak of close to 200% of GDP or national income over the next two years, which it called "highly unsustainable".
On Tuesday, Mr Tsipras said in an interview on state television that he did not believe in the bailout offered but was willing to implement it to "avoid disaster for the country" and the collapse of the banks.
The conditional agreement to receive up to €86bn (£61bn; $95bn) from the EU over three years depends on further economic reforms - including the labour markets, banks and privatisation - being passed after Wednesday.
Hard-liners in Mr Tsipras' own Syriza party are likely to rebel and the junior coalition party, the Independent Greeks, have offered only limited support for the reforms

More on this story:

Bailout deal at a glance
Europe's media stress drama of Greek deal
Tough test for Tsipras
France buoyed by Brussels agreement
Meanwhile, unions and trade associations representing those including civil servants, municipal workers and pharmacy owners have called or extended strikes to coincide with Wednesday's parliamentary votes.
Greece also faces an immediate cash crisis. Banks have been shut since 29 June.
Mr Tsipras warned banks are unlikely to reopen until the bailout deal is ratified, and this could take another month.
A suggestion of providing Greece with emergency funding under the EU-wide European Financial Stability Mechanism has been opposed by Britain, which is not part of the euro but is an European Union member.

Greek laws to be passed by Wednesday

  • Ratifying eurozone summit statement
  • VAT changes: Top rate of 23% to extend to processed food, restaurants etc... 13% to cover fresh food, energy bills, water and hotel stays, 6% for medicines and books
  • VAT discount of 30% to be abolished on islands, but remotest islands to keep discount until next year
  • Corporation tax raised from 26-29% for small companies
  • Luxury tax for big cars, boats and swimming pools up from 10-13%; farmers' tax up from 13-26%
  • Early retirement to end (phased in by 2022); retirement age raised to 67
  • Greek statistics authority Elstat to have full legal independence

Greek debt crisis

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Thursday, July 2, 2015

Greek debt crisis: IMF says extra 50bn euros needed

by Isabelle Roussel and Biodun Iginla, BBC News, Brussels/Athens

4 hours ago


Greece will need an extra 50bn euros ($55bn) over the next three years to stabilise its finances under the existing, disputed bailout plans, the International Monetary Fund (IMF) says.
The IMF also cut its forecast for Greek economic growth from 2.5% to zero.
And it repeated its earlier suggestion that Greece needed debt relief in the form of extended repayment periods and lower interest rates.
The report comes ahead of Sunday's referendum on existing bailout terms.

The European Commission, the European Union's executive arm - one of the "troika" of creditors along with the IMF and the European Central Bank - wants Athens to raise taxes and slash welfare spending to meet its debt obligations.
Greek Prime Minister Alexis Tsipras has urged Greeks to vote "No" to the creditors' proposals, saying a rejection will lead to a "better agreement".
But the head of the grouping of eurozone finance ministers said a "No" vote would not provide Greece with an easy way out of its economic crisis, and the Greek PM's suggestion was "simply wrong".
Meanwhile, long queues of pensioners have formed outside Greek banks for a second day.

At the scene: Joe Miller, BBC News, Athens
Greece's banks have now been closed to all but pensioners for four days, and Athenians have settled into a crisis routine.
At the stroke of midnight, queues form at cash machines as locals scramble to obtain their daily €60 ration.
Neighbours confer over which ATMs are still dispensing €20 bills - those with other denominations can only pay out €50 per day.
But despite the posters that adorn every tree and lamppost calling for "everyone to take to the streets", the large protests of the past few days have largely died down.
In the radical left Exarcheia neighbourhood, exhausted young anarchists lounge outside bars and cafes, and let the banners hanging across the central square speak for them.
"No to EU and IMF terrorism," reads one.
"€ + Germany = oppression," reads another.
Follow the latest updates
Did Tsipras change course?
Splits threaten Syriza coalition
Is Greece's exit from the euro inevitable?

The IMF reached its latest conclusions before the Greek government broke off talks last weekend with creditors and ordered banks to shut for a week.
In its report on the embattled Greek economy, the Washington-based global financial body says changes in Greek policies and its economic outlook since earlier this year "have resulted in a substantial increase in financing needs" not met by the existing proposals of either the government or its creditors.
Greece's banks stayed shut this week after emergency funding from the European Central Bank (ECB) was frozen, though some branches have reopened to allow pensioners - many of whom do not use bank cards - a one-off weekly withdrawal of up to €120.

Media caption Greek Finance Minister Yanis Varoufakis: "The programme imposed on us will go down in economic history as the greatest cock-up ever"
Withdrawals from cash machines are capped at €60 a day.
Local media are reporting growing pressure on the economy, with businesses halting production because they are unable to pay suppliers, and some shops considering giving unpaid leave to staff.
Greece's left-wing Syriza government, elected on an anti-austerity platform, has been in deadlock with its creditors for months over the terms of a third bailout. Last weekend, it took the unilateral decision to hold a national vote on those terms.
On Tuesday, the previous eurozone bailout expired, depriving Greece of access to billions of euros in funds, and Athens missed a €1.5bn repayment to the IMF.

Queues at the cash machine have become routine for Greeks
Tourists continue to visit the cradle of European civilisation despite the financial crisis
EU leaders have warned that a "No" vote on Sunday may see Greece leave the eurozone - though Mr Tsipras says he does not want this to happen.
Divisions in Greece have sharpened ahead of the vote. A poll cited by euro2day.gr said 47% of people were leaning toward a "Yes" vote, with the "No" camp at 43%. A previous poll suggested the "No" camp had a shrinking lead.
The BBC's Chris Morris, in Athens, says the absurdly short referendum campaign may well turn on the question of who succeeds in framing the narrative best.
Some people will vote no to austerity, he says, others will vote yes to the euro. But much will depend on what the waverers, the people in the middle ground, decide the referendum is really all about.
Greek Finance Minister Yanis Varoufakis has said he will resign if the "Yes" campaign wins.
But he told the BBC he was confident that a deal would be reached very shortly after Sunday's referendum, allowing banks to reopen on Tuesday.
"A lot of people will interpret this as a 'Yes' or 'No' to the euro but it is the wrong interpretation. Our government is determined to stay in the euro, it's not on our radar screen to do anything other than that."
Mr Varoufakis described the programme that creditors had imposed and wanted to continue imposing on Greece as "a travesty, a comedy of errors".
He added: "The programme they imposed on Greece is going to go down in economic history as the greatest cock-up ever."

Lenders' proposals: Key sticking points
  • VAT (sales tax): Alexis Tsipras accepts a new three-tier system, but wants to keep 30% discount on the Greek islands' VAT rates. Lenders want the islands' discounts scrapped
  • Pensions: Ekas top-up grant for some 200,000 poorer pensioners will be phased out by 2020 - as demanded by lenders. But Mr Tsipras says no to immediate Ekas cut for the wealthiest 20% of Ekas recipients
  • Defence: Mr Tsipras says reduce ceiling for military spending by €200m in 2016 and €400m in 2017. Lenders call for €400m reduction - no mention of €200m
Source: European Commission document, 26 Jun 15 (pdf)
Greek debt jargon explained
Tsipras and his Greek gamble


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Greek debt crisis

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