Brussels, 31/07/2015 (Agence Europe) - The European Commission and the IMF itself were keen on Friday to play down the impact of the fact that the IMF cannot clearly commit to a third aid plan for Greece until the debt question has been addressed, as was pointed out by the Financial Times on Thursday (see EUROPE 11370).
“There is nothing new,” explained European Commission spokesperson Mina Andreeva, it's simply that “the IMF has a different set of procedures and a different timetable.” Andreeva said that this was a two-step process (drawing up a programme and then examining the debt question) that was fully compatible with the European agenda. “What matters is progress on the ground, we're doing exactly this with the IMF fully participating in the talks in Athens,” concluded Andreeva.
The question for the Commission is not so much whether the IMF will participate in the new aid plan, but rather when it will finally decide to do so.
The IMF is keen to offer reassurance. Pointing out that any aid programme has to be viable, an IMF representative said on Thursday that the debt question would not be discussed until the autumn and the Greek authorities would be waiting for the next few months before taking a number of decisions about structural reforms: “So I think everybody understands that the IMF can only be in at that time when these decisions on these two sides are taken,” he explained in an official statement. Commenting on the current IMF programme that is due to last until the end of March 2016. “The criteria of the IMF when approving a programme is always that the programme has to meet its objectives by the end of the programme period. The current programme is off-track and it will only be able to reach the objectives by the end of the programme period, so we need to recalibrate the programme and get an essentially longer time to reach the objectives, and this is why we have a longer programme now under consideration.”
The representatives of the 'institutions' (European Commission, ECB, IMF and European Stability Mechanism) met with Greek finance minister Euclid Tsakalotos on Friday. The international media has not yet found a name for this four-way group of lenders. As is stressed by both the ESM and the Commission, there is nothing new about the presence of the ESM as an observer and sometime advisor. The ESM was already represented in the talks on a bailout for Cyprus. A European source said that it has much greater visibility these days and it's simply that attention is now focused on it.
The Greek prime minister, Alexis Tsipras, is actively seeking to contain the rebellion within the Syriza party. After a Syriza central committee meeting on Thursday 17 July, 17 committee members resigned, saying that Syriza had been turned into a pro-austerity party. The central committee decided to convene an emergency party congress in September and the party will define its strategy. The idea of a referendum within the party on the conditions of a third aid plan was rejected in the end. The prime minster confirmed that he had personally instructed his former finance minister, Yanis Varoufakis, to prepare a plan B in the event of a breakdown of talks with the country's lenders. This would be an emergency plan rather than a Grexit, he explained, however, adding that the 'institutions' were the only ones with a plan for Greece leaving the eurozone. (Elodie Lamer)