The window of opportunity for the IMF to come on board the third Greek bailout plan will soon be closed, Poul Thomsen, head of the European department at the Washington-based institution, warned at a press conference on Friday 20 April.
“To have a programme, we need two points: an approved adjustment programme and then at least one review. If we don't have that, it's not a programme”, he explained. “The fact that the ESM programme is coming to an end (in August: Ed) means that time is running short for us to activate a programme”, he added.
What is the point of putting in place an IMF bailout plan for Greece so late in the process? Thomsen explained that the “important signal” sent out would be as follows: the IMF's assessment of Greece's economic and government debt-related policies are in line with the Fund's conditionality criteria. This signal is particularly important as Greece will have to finance itself alone on the financial markets from mid-August 2018. He added that the IMF's validation was still important for certain member states.
In order to be able to recommend that the IMF Council of administration activate an aid plan for Greece, we need “agreement on a broad strategy” on the viability of the Greek government debt, he said. Then, “at the end of the ESM programme, we will have an exact quantification, a precise calibration of the parameters in light of the debt sustainability analysis”.
He went on to say that some measures to relieve the Greek debt could be decided upon now, “but kick in later”. “But we need to decide under what conditions they will kick in”, he added. For instance, there could be a “mechanism to apply the agreed measures as long as they are very concrete, very specific and automatic”. (Original version in French by Élodie Lamer)