Will IMF Help Athens Pay Its Debts?

Eurozone finance ministers gave the green light to an 85 billion euro bailout for Greece on Friday, an indication interpreted by some lawmakers as a definite sign that Greece is interested in remaining a member of the euro area.

The bailout approval came about despite the growing resistance within Alexis Tsipras’ Syriza party as well as concerns about the longer-term sustainability of Greece’s public debt.

Some Eurozone members worry about the extent of involvement by the International Monetary Fund that would enable Athens to honor its August 20 repayment deadline with the European Central Bank.

Merkel Reassures

Returning after a short summer break, German Chancellor Angela Merkel tried to reassure skeptical lawmakers on Sunday that the IMF would take part in the new bailout deal. She told reporters she was certain that Christine Lagarde, head of the IMF, would make every effort to participate if all conditions of the agreement were met.

“Mrs. Lagarde, the chief of the IMF, made very clear that if these conditions (Greek pension reform and debt relief )are met, then she will recommend to the IMF board that the IMF takes part in the program from October,” Merkel said. “I have no doubts that what Mrs. Lagarde said will become reality.”

The German Parliament is set to approve the package for Greece in a special session to take place in the Bundestag on Wednesday.

German approval of the bailout is almost certain but some members believe that the IMF could wait until October to decide whether to participate. If that were the case, it would force lawmakers to vote without any guarantees that the IMF will have a role.



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