Greece Bailout: IMF and EU Reach Common Position on How to Proceed

The institutions in charge of Greece’s bailout have reached a “common position” on how to proceed, German finance minister Wolfgang Schaeuble has announced.

Wolfgang Schaeuble’s comments appear to indicate that deadlock between the EU and the IMF over the next steps may have been resolved.

The IMF has said Greece needs more leeway to pay its huge debts before further rescue funds can be released.

However, the eurozone has been reluctant to go much further.

Arriving for a meeting of eurozone finance ministers in Brussels, Wolfgang Schaeuble said: “I believe the institutions have a common position and that we will get to a point today where the technical mission can go to Athens so we can get a result.”

In its most recent assessment of the Greek economy, the IMF said: “Greece cannot grow out of its debt problem. Greece requires substantial debt relief from its European partners to restore debt sustainability.”

Eurozone governments have provided some debt relief already, in the form of lower interest rates and extended repayment periods. IMF staff thinks Greece needs more concessions.

However, the IMF has said there was no need for what it calls an “upfront haircut” – a reduction in the principal that has ultimately to be repaid.

In another development, Klaus Regling, the CEO of the European Stability Mechanism – the eurozone’s bailout fund – said in a newspaper interview that Greece’s finances were improving faster than expected.

He told Germany’s Bild that Greece would probably need far less than the agreed maximum loan of 86 billion euros by August 2018 as a result.

Athens has made a 2 billion euro repayment to the bailout fund as expected, which Klaus Regling said showed “Greece is a reliable contract partner. It is a sign that the restructuring of the Greek banking sector is progressing well”.