This report does not bode well for Greece Prime Minister Alex Tsipras’ efforts to resolve what he regards as an impasse over negotiating process, but the IMF and possibly the ECB regards as a more fundamental outtrade. The IMF clearly regards the structural reforms that the previous government agreed to as very much in place, while Greece appears to believe that it had won the right to renegotiate them. Various media reports over the last few week suggest that Greece’s creditor are largely aligned with the IMF view, but that could unduly reflect German and financial services industry bias in reporting.
Regardless, the IMF was clearly set forth in the memo as having to approve the reforms package with Greece before any funds could be released. Tsipras’ efforts to reach a “political” solution by going to top European officials ex Lagarde, meaning Merkel, Hollande, ECB chief Draghi, EC head Juncker look unlikely to succeed. Greece has never been an equal party in these talks. As we reported earlier, Greece was not a party to the drafting of the February memo; it was presented to Tsipras as a fait accompli, and the most favorable report says he asked only to have one word changed. Unless Merkel decides Grexit is too big a risk and decides to puts her foot down, Greece is unlikely to get any breaks. Indeed, the meeting could wind up having the European leaders tell Tsipras that he is at the end of his rope and needs to make some tough choices.
As Marshall Auerbach assessed the harsh remarks of the IMF via e-mail:
Really? Worse than Malaysia when they imposed capital controls? Worse than those corrupt Latin American dictatorships from the 1970s and 1980s? Worse than today’s Ukraine government?
I guess you can say the deck is really stacked against Greece pour decourager les autres.
International Monetary Fund officials told their euro-area colleagues that Greece is the most unhelpful country the organization has dealt with in its 70-year history, according to two people familiar with the talks.
In a short and bad-tempered conference call on Tuesday, officials from the IMF, the European Central Bank and the European Commission complained that Greek officials aren’t adhering to a bailout extension deal reached in February or cooperating with creditors, said the people, who asked not to be identified because the call was private.
German finance officials said trying to persuade the Greek government to draw up a rigorous economic policy program is like riding a dead horse, the people said, while the IMF team said Greece’s attitude to its official creditors was unacceptable. The German Finance Ministry didn’t respond to multiple requests seeking comment.
Concern is growing among officials that the recalcitrance of Prime Minister Alexis Tsipras’s government may end up forcing Greece out of the euro, as the cash-strapped country refuses to take the action needed to trigger more financial support. Tsipras is pinning his hopes for a breakthrough on a meeting with ECB President Mario Draghi, German Chancellor Angela Merkel, French President Francois Hollande and European Commission head Jean-Claude Juncker this week in Brussels.