Tsipras accuses IMF of trying to push Greece into default
Alexis Tsipras, the Greek prime minister, has accused the International Monetary Fund of attempting to push his country into default and demanded clarification of remarks made in a leaked teleconference transcript.
The row, which prompted an emergency meeting of key Greek ministers on Saturday, was sparked by comments made by the head of the IMF’s European operations and its top Greek bailout monitor on a call two weeks ago.
According to a transcript published by WikiLeaks, IMF officials expressed frustration about the EU’s slow progress in granting debt relief to Greece, and mentioned that euro-area governments have in the past left key decisions until the Greek government was on the point of bankruptcy.
Greece has publicly interpreted the comments as a plan by the IMF to prolong negotiations on whether to take part in euro area’s latest bailout of the country until July, when the Greek government is faced with its next big debt payment. The logic would be that the impending deadline would give the IMF more leverage, allowing it to extract concessions out of a reluctant Germany on the debt-relief that the IMF believes is essential for Greece’s long-term recovery.
Athens has erupted in anger over the issue even though the comments set out in transcript seem to be a reflection on, and annoyance with, the EU’s inability to take proactive decisions, and do not set out any intention to take advantage of the July deadline.
The IMF has also flatly denied any intention to engage in brinkmanship around credit events. An IMF spokesman told the FT that the organisation “has never and would never operate in that way”.
Mr Tsipras reacted to the leak by writing to IMF managing director, Christine Lagarde, to express his “deep concerns”. In his letter, sent on Saturday, he says that what is at stake is nothing less than “whether Greece can trust, and continue negotiating in good faith” with the IMF.
Greek officials have been even more forthright off the record, arguing that the transcript is evidence that the IMF is “blackmailing” Germany on the debt relief issue.
The timing could not be worse for the IMF, whose officials are set to return to Athens tomorrow for more technical discussions on the bailout programme.
Despite the competing interpretations over the transcript of the teleconference, it remains the clearest sign to date that the Fund wants to leave Greece’s €86bn rescue to the EU alone and wash its hands of a programme that has led to a torrent of criticism. According to the document, Poul Thomsen, head of the IMF’s European bureau, at one point suggested confronting Angela Merkel, the German chancellor, to either agree to debt relief or allow the IMF to exit.
“The real fight here is between Germany and the IMF; Greece is a mere spectator” said Mujtaba Rahman who heads European analysis at Eurasia Group. “As no IMF means no more bailout, Germany will ultimately support debt relief, it really has no other choice”.
Several observers in Athens said they suspected the Syriza government could be behind the leak.
“The government’s reaction suggests it’s trying to manufacture a crisis to make the fund pull out of the Greek programme, hoping to make a deal on easier terms with the EU,” said Miranda Xafa, a researcher with the Centre for International Governance Innovation.