Greek crisis: IMF walk out a warning to Greece, say Germans

16 Jun 15

The International Monetary Fund’s decision to walk out of negotiations between Greece and its creditors on Thursday was a warning to Athens, the German finance ministry said today. 

Ministry spokesman Martin Jaeger said the IMF made a “very clear statement” yesterday about the status of the talks.

“This is a serious statement that we acknowledge of course. We understand it as an appeal, a warning to the Greek side, to intensify the talks,” Jaeger said.

The IMF’s technical team left the ongoing negations in Brussels due to there being a lack of progress in narrowing differences on reform programmes like pensions and tax that would help the country avoid default.

IMF spokesman Gerry Rice said there was “major differences between us in most key areas” and that “we are well away from an agreement”.

“Our team has returned from Brussels, the technical team,” Rice said.

He reiterated that the fund remains engaged in helping the country overcome issues with its beleaguered economy, but the “ball was very much in Greece’s court right now”.

“What I can tell you is, and again, I don’t think it’s a surprise that there’s been a lot of public discussion of these issues that some major obstacles remain in the discussion of the reforms and the programmes,” he told a press briefing in Washington.

“These are around pensions, taxes and then, the third element is the financing and, as you know we said before and others have said at the end of the day, the whole thing has to add up.”

Pensions and wages account for 80% of Greece’s total primary spending, which means it would not be possible for the country to achieve its medium term fiscal targets without reforms.

Athens remains in a four-month standoff with international creditors over the release of additional funds, as they continually fail to agree on economic reforms as a condition of the bailout.

The ‘troika’ of creditors – the IMF, the European Union and the European Central Bank – have offered an economic reform package to Greece, including a series of austerity measures and changes to VAT, pensions and wages, as a bargaining tool to unlock €7.2bn in new financial help.

  • Judith Ugwumadu
    Judith Ugwumadu

    Judith writes about public finance, public services and economics across Public Finance International and Public Finance. She previously undertook reporting stints at Financial Adviser, Global Security Finance and The Sunday Express.

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