The battle can begin the write-off of Greek debt: IMF’s … – z24

German Chancellor Angela Merkel (L) and IMF Managing Director Christine Lagarde. Photo EPA

The euro countries have made some temporary sutures to keep Greece afloat for a few months. A sustainable Greek deal requires agreement between the International Monetary Fund and the German Chancellor Angela Merkel on debt relief for Greece.

The Greek Government feels good to whom she offers the most currently expect the International Monetary Fund (IMF)

is Friday. Greece officially requested the IMF to take part in negotiations on a third aid package worth 86 billion euros. The IMF announced to take the request into consideration.

IMF and new bailout package Greece

The role of the IMF, a global emergency fund in which 187 countries are members in the world, is crucial . And not only because countries like the Netherlands, the IMF is happy to want to implement strict austerity and reform measures in Greece.

If euro 86 billion in new loans on the table to come to Greece, it IMF badly needed as a co-financier. The other euro countries feel there is little fact for that amount entirely independently to cough up.

But the IMF’s involvement is a firm price tag, especially for Germany. Economists from the IMF

in recent weeks and months, not fail to emphasize that the Greek debt has become unsustainable in the longer term. The IMF expects the Greek government debt by the recession could increase over the next two years, easily further 200 per cent of national income.

Because Greece is currently living off soft loans from its creditors and therefore pay relatively low interest rates , short-term financial burden is not the biggest problem. Definitely not be used partly as new loans for Greece to repay old loans and paying interest. The problem is thus simply pushed further into the future.

Greek debt unsustainable

But the IMF has done long-term analyzes on the future viability of the financing burden for Greece. And they look simply not good. The IMF will probably participate only on a new support program for Greece if there is a realistic prospect for the sustainability of the Greek debt.

However, Germany has so far adamant opposition to debt relief for the Greeks. At least, an immediate write-off on the top of the Greek debt. The alternative is an extension of the maturity of Greek government bonds and further easing of the interest rate conditions. In the view of the IMF should you think of at least a doubling of the maturities of existing loans.

German Chancellor Angela Merkel maturity extension not explicitly rejected, but stresses there for the time being that Greece first have to reform substantially and economize. But director Christine Lagarde, the IMF believes that a new agreement on Greece is unsustainable without restructuring the debt.

The question is therefore whether Merkel and Lagarde in the coming weeks, or perhaps months, manage to reach an agreement to come. Underlying There is much at stake: if Germany blocks debt relief and IMF withdraws, the road to a Grexit is again fully open