Tuesday, February 24, 2015

IMF: Greek Proposal Still Lacking - (Deal or No Deal?)

Deadlines have passed and something has been agreed to. But it appears the IMF is not yet satisfied with the new "deal." In a letter from Christine Lagarde, the IMF says the Greek proposal does not go far enough. Below are quotes from a Wall Street Journal article on the IMF letter.

"Even if Greece and some Europeans would like to break up with the International Monetary Fund, both still need the fund’s cash and its credibility.

That’s why a new letter by IMF Managing DirectorChristine Lagarde to Eurogroup presidentJeroen Dijsselbloem, shooting down Greece’s new package of economic proposals, will continue to shape negotiations between Greece and Europe over bailout financing. The letter also points to months of of tough talks ahead."

"The IMF chief said the Athens proposals were “sufficiently comprehensive to be a valid starting point” for negotiations.
“In quite a few areas, however, including perhaps the most important ones, the [Greek proposal] is not conveying clear assurances that the Government intends to undertake the reforms envisioned” in the existing bailout program, Ms. Lagarde said in a letter that was requested by the Eurogroup.
In particular, she targeted pension and tax overhauls, privatization and opening up closed markets. Those measures are “critical for Greece’s ability to meet the basic objectives of its fund-supported program,” she said.
That’s why the IMF won’t release the remaining money designated for the Greek program."
. . . . . 
My added comments:
I guess the next "deadline" is four months from now. We'll see.

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