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IMF Want No Part of Third Greek Bailout

IMF Want No Part of Third Greek Bailout

Now that approval has been given for Greece to begin negotiations with the eurozone on their 3rd bailout (for 86 billion euros / $95 billion), the International Monetary Fund (IMF) is making it clear they would like no part of any deal whilst the issue of the Greeks ability to actually repay has not been resolved. IMF officials remain skeptical of any deal; however, that may change if the eurozone and Greece address its concerns. The IMF is not suggesting any reduction in the Greeks outstanding debt, only longer repayment terms and the possibility of “grace periods” should Greece, once again, be unable to make a structured payment.

The eurozone and the IMF are in agreement regarding the need for reforms (or, as many Greeks call them, austerity measures). The primary reforms would be to spending controls and tax revenue maintenance, with additional “structural” reforms to enable faster economic growth. Additionally, any debt deal would need approval from a select number of European parliaments, such as the Bundestag of Germany.

The European Stability Mechanism (ESM), the eurozone’s bailout agency, has the capacity to provide 455 billion euros ($502 billion) in new loans, so financing the Greek bailout is achievable without the IMF’s participation in the process. If you are concerned that too many governments, ours included, are relying upon debt to provide economic “security” (the U.S. national debt, as of today, stands at over $18 trillion), please Like & Share this post.

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