IMF tells EU to pick up bill for any Greek debt delay
EU must carry the full cost of any easing of the debt-rescue programme for Greece because the IMF has run out of resources for this, says IMF representative.
ATHENS - The European Union must carry the full cost of any easing of the debt-rescue programme for Greece because the IMF has run out of resources for this, IMF representative Thanos Catsambas said on Friday.
Greece, which is deep in tough negotiations with its EU-IMF creditors over conditions for obtaining the next slice of rescue help, is seeking an easing of the timetable for achieving key reform targets by up to two years.
Catsambas said in an interview with Kathimerini newspaper that if a delay were agreed, the European Union should carry the whole cost. He said that the extra costs to creditors of a delay could be financed by "additional" funds or by "a restructuring of the debt held by the official sector," meaning the European Central Bank.
Catsambas, a vice executive director of the International Monetary Fund, ruled out any extra contribution from the IMF. "Any additional funding in any form will come exclusively from Europe," he said, explaining that the IMF had exhausted all of its ways of providing Greece with loans.
"The IMF has exhausted its possibilities to extend the loan beyond the amount approved last March. "Therefore, and even if the IMF considers that (participation by the public sector) to be the most advisable solution, the final decision rests with Greece's European partners and will be determined by the political and institutional restrictions faced by governments and the ECB."
Greece is supposed to meet key targets of its adjustment programme in return for EU-IM bailout funding by 2014 but wants this deadline extended to 2016. On Friday, auditors from the IMF, EU and ECB, broke off until next week critical and tough negotiations with Greece over extra budget action in return for the release of the next slice of rescue aid.
An EU summit on October 18 and 19 is to decide on the Greek request for extension of the 2014 deadline. And the issue was also to be discussed later on Friday in Rome at a meeting between Greek Prime Minister Antonins Samaras and the head of the Italian government Mario Monti.
Under the arrangements underpinning the latest package of bailout funds, and the associated conditions for extra restructuring, creditor private banks have already written off Greek debt worth about 107 billion euros ($139 billion).