Greece’s road to economic recovery just got very messy.
A leaked transcript by Wikileaks allegedly revealed how the International Monetary Fund planned to stop bailing out Greece in a bid get force European lenders to offer debt relief in its place.
In other words, the leaked transcript suggested that the IMF was going to spook the beleaguered country on purpose, as well as the rest of the members of the 28 nation bloc, by saying that it wouldn’t be giving Greece anymore cash. In turn, it would mean the EU creditors would be forced to step in and help Greece in order to stop it defaulting.
And now the former finance minister of Greece, Yanis Varoufakis, used the apparent leak to highlight how the way creditors are handling the bailout of Greece is not working and things have got to change.
” In 2016, 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.”
Officials from EU and the IMF will resume talks in Athens on Greece’s fiscal and reform progress next week. They will conclude a bailout review that will lay out what Greece needs to do in order to unlock further loans and pave the way for negotiations on long-desired debt restructuring.
However talks are set to be even more tense than usual after Greece demanded an explanation over the alleged tactic. Already, the bailout reviewed was post-poned twice since January due to a rift among the lenders over the estimated size of Greece’s fiscal gap by 2018, as well as disagreements with Athens on pension reforms and the management of bad loans.
An IMF spokesman in Washington said the Fund did not comment on “leaks or supposed reports of internal discussions” but added that the IMF had made its position known in public.
“We have stated clearly what we think is needed for a durable solution to the economic challenges facing Greece – one that puts Greece on a path of sustainable growth supported by a credible set of reforms matched by debt relief from its European partners,” the spokesman said.
At the beginning of February, Varoufakis spoke to Business Insider Deutschland and said that although the economy has not deteriorated as much as feared in the last year, the EU’s multi-billion-euro bailout packages seem to have helped only a little.
“No one believed that the compromise [money given to Greece last year] would be of any use, neither IMF chief Christine Lagarde, nor German Finance Minister Wolfgang Schäuble. Chancellor Angela Merkel didn’t believe it and neither did Greece’s Prime Minister Alexis Tsipras,” said Varoufakis.
“It was just a show that revealed that Europe is not working. We are throwing money, which we are taking from the poorest, at the problem. And since this is frustrating the people in every country, right-wing parties such as the National Front in France are on the rise. So they are benefiting from this.”