Greece wants IMF explanations over Wikileaks report

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Greece on Saturday demanded “explanations” from the International Monetary Fund (IMF) after Wikileaks said the lender sought a crisis “event” to push the indebted nation into concluding talks over its reforms.

IMF officials, in an internal discussion, allegedly voiced exasperation with Greece on its slow pace of reform, complaining Athens only moved decisively when faced with the peril of default, the website said.

A transcript placed on the Wikileaks website on Saturday purports to be that of a teleconference that took place on March 19.

The whistle-blowing organisation has published a conversation purporting to have taken place between Iva Petrova and Delia Velculescu, who have been representing the IMF in the negotiations with Greece, and Poul Thomsen, director of the Fund’s European Department.

The conversation reveals the internal strategy of the fund in order to force the Greek government to accept further measures such as cutting Greek pensions and working conditions, and to persuade German Chancellor Angela Merkel to accept debt relief.

Thomsen is alleged to have said that the ongoing review should be delayed so that a threat of a new “fiscal accident” at the time of the Brexit referendum would allow them to push both sides.

“I am not going accept a package of small measures. I am not…” said Thomsen. “What is going to bring it all to a decision point? In the past there has been only one time when the decision has been made and then that was when [the Greeks] were about to run out of money seriously and to default. […] And possibly this is what is going to happen again. In that case, it drags on until July, and clearly the Europeans are not going to have any discussions for a month before the Brexit…”

Wikileaks said the discussion showed that the IMF was planning to tell Chancellor Merkel it would leave the Troika if the IMF and the Commission fail to reach an agreement on Greek debt relief.

And that because Mr Tomsen knows that this would be very difficult for Mrs Merkel to manage under the pressure of the Bundestag and the refugee crisis at the same time.

“Look you, Mrs. Merkel, you face a question: you have to think about what is more costly, to go ahead without the IMF—would the Bundestag say ‘The IMF is not on board?’, or [to] pick the debt relief that we think that Greece needs in order to keep us on board?” said Mr Thomsen, according to the leaked conversation.

Athens is under pressure to address the large number of non-performing loans burdening Greek banks and to push forward with a pension and tax overhaul resisted by farmers and white-collar staff.

The IMF has yet to officially sign onto Greece’s latest bailout and is making its participation conditional on the fact that no ground is yielded on the reforms needed by Athens, especially on pensions.

Greek Prime Minister Alexis Tsipras has accused the IMF of employing “stalling tactics” and “arbitrary” estimates to delay a reforms review crucial to unlock further bailout cash.

Read here the entire WikiLeaks document.