IMF, Eurozone fail to resolve Greece bailout rift

IMF, Eurozone fail to resolve Greece bailout rift

Greece's debt reached 311 billion euros last year or about 180% of output.

The Dollar Business Bureau 

Finance ministers from Eurozone failed to come out on a consensus to overcome the deep divisions with the International Monetary Fund (IMF) over a bailout of Greece and reached no agreement on relief of debt to the country. 

The IMF and 19-members single currency group are debating over how much debt relief Athens needs, and the economic targets required of the nation that the Fund says are too strict.

“Today we will not be able to go into depth on the Greek issue. We will have to wait,” said Wolfgang Schaeuble, Finance Minister of Germany, the most influential member of the Eurozone, as he arrived for discussions on Greece with his group’s counterparts. 

The months of arguing have delayed the progress of 86 billion euro ($92.4 billion) bailout programme for Greece which was agreed in 2015 and had stalled the important loan payments that Greece will require by this summer to prevent the rekindling of the crisis of debt. 

Headed by Christine Lagarde, the IMF refuses to give further loans to Athens without substantial changes to the requirements wanted from Greece’s government. 

In spite of conflict, Eurozone head Jeroen Dijsselbloem asserted that the IMF chief had assured him that IMF will remain committed to the bailout programme of Greece. 

“She reassured me that the IMF still has strong intent to participate in the programme in full," said Dijsselbloem. 

Germany, the biggest creditor of Greece, said that Athens is on the task to meet targets without extra debt relief and has asked the government of Greece to deliver on the reforms. 

At the core of the problem is a demand raised by Eurogroup that Athens delivers a major balance or surplus on spending on public prior to debt repayments, of 3.5% of Gross Domestic Product (GDP). 

The target is quite huge and most of the nations do not even come near but Germany and other hardliners members are insistent that Athens reach it in the coming few years. 

Already high, the debt of Greece reached 311 billion euros last year or about 180% of output, as per the recent EU data.

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The Dollar Business Bureau - Jan 27, 2017 12:00 IST