The IMF has issued an ultimatum to Eurozone finance ministers. Give Greece debt relief or we pull out of the bailout program. However, IMF hardly the good guy here, demanding those lazy, shiftless Greeks need to do more “structural reform.” Clearly, reducing that nation to penury hasn’t achieved the proper amount of abject groveling yet (or the opportunity to buy assets for distressed prices.)
Cynics might opine this means “big Euro-zombie banks (DB in particular) now have little or no Greek government bond exposure.” Thus the bill will get dumped on taxpayers. How convenient. Yes, reducing debt will help Greece a bit. But the terms being imposed upon it seem designed to make it a broken vassal nation, independent in name only.
In a letter to all 19 ministers sent on Thursday night and obtained by the Financial Times, Christine Lagarde, the IMF chief, said stalemated talks with Athens to find €3bn in “contingency” budget cuts, which have gone on for a month, had become fruitless and that debt relief must be put on the table immediately, or risk losing IMF participation in the programme.
This is primarily aimed at Merkel and Germany.
This “purposely leaked” letter puts enormous pressure on German chancellor Angela Merkel who is already under severe strain due to her complete bungling of the refugee crisis.
Pick Your Poison
1. The German parliament only agreed to do this deal if the IMF was in it.
2. The Germany parliament only agreed to do this on the specific terms previously offered.