ESM Head Official Regling is Optomistic in IMF Participation of Third Greek Bailout
Managing Director of the European Stability Mechanism, Klaus Regling, said on Thursday he expects the IMF to participate in a third Greek bailout bringing as much as $18.11 billion suggesting options for easing debt burdened Greece including loan maturity extensions, suspending interest payments and transferring central bank profits.
The IMF counteracted saying Greece’s debt is unsustainable and it does not want to participate in the bailout until debt relief is foreseeable.
“Overall, I’m confident,” says Regling, expecting support for the bailout to grow in Athens adding, “There has been a large majority in Greece’s parliament for these reforms.” Regling has remained confident in the €86 billion aid package with participation from the IMF, although its involvement remains uncertain.
A cut in Greece’s nominal debt, known as a haircut, is not yet on the agenda, although Regling mentions debt relief for Greece is possible in autumn.
Greek Prime Minister Alexis Tsipras said on Wednesday he favors longer repayment terms and lower interest rates on the country’s debt burden.
In an interview on Alpha TV, Tsipras made no mention of writing off any debt, a campaign promise made during the January election, opposed by the largest Greek bailout contributor, Germany.
Greek has threatened an exit from the eurozone should Athens not fulfill the promised conditions of this third bailout agreement.
“This threat as a possibility must always be there and is still there,” said Regling.
Greek Prime Minister Tsipras resigned earlier last week in attempts to restore trust by calling early elections with his choosing of candidates during the resignation. The country is now expected to enter a pre-election period today.