Merkel unwilling to save Greece without IMF involvement
Merkel’s first public comments since euro-area finance ministers backed the 86 billion-euro ($96 billion) aid package were partly aimed at her party’s lawmakers, who want the chancellor to ensure that the IMF contributes to the latest Greek rescue. Germany’s lower house will vote on the bailout on Wednesday.
Merkel is quoted by Bloomberg as saying in an interview on ZDF television Sunday that IMF Managing Director Christine Lagarde has made it clear she will back the fund’s participation starting in October if conditions including eased terms on previous aid loans to Greece are met.
“And I have no doubt that what Mrs. Lagarde said will then become reality,” she said in her televised interview. “We said in July that maybe -- no, not maybe -- there is still leeway on the extension of maturities, on interest rates.”
Merkel’s allies are already selling the Greek bailout to German lawmakers, who set their approval vote for the day before an Aug. 20 deadline for Greece to pay 3.2 billion euros to the European Central Bank.
The chancellor rearranged her schedule to try to limit the party revolt against aiding Greece, moving up a trip to the Expo 2015 fair in Milan by 24 hours to Monday so she can address her caucus Tuesday on the night before the vote.
According to the 29-page memorandum of understanding Greece agreed with creditors, a copy of which was obtained by Reuters, Greek must move to rapidly privatize its ports, regional airports and its power grid operator.
Greece would also take steps to tackle the mountain of bad loans weighing on its banks, according to Reuters.
The Greek authorities also ought to reform the country's pension system, labor and trade markets as well as public sector.
Independent economists share the IMF skepticism over Greece's ability to pay off its debts, which, including the new bailout program, came close to €400 billion, Vestifinance.ru says referring to IceСap Asset management analysts.
In addition, amid the latest developments (bank holidays and capital movement restrictions) the Greek economy looks weaker than ever, and it means its tax revenue will dwindle.
After the 2009 crisis Greece's debt amounted to about €140 billion and a new bailout plan was needed then. In 2012, the debt reached €240 billion, and now the country is badly in need of new financial injections. But why should something change this time?
Vestifinance.ru singles out an opinion voiced long ago as most convincing – debts are imposed on Greece deliberately to make the country fully dependent on lenders.
Purposes may be various. First - while the IMF was involved in the bailout plan, the United States had a chance to take advantage of the Greek story for supporting the dollar value and making Europe's state more complicated.
While financial markets are tied to each other and their key players are American financial giants, the United States can easily put pressure on any country, even Switzerland, since, as a rule, European problems trigger capital flight toward the franc, according to Vestifinance.ru. ---0-----