IMF chief Christine Lagarde couldn’t “preclude” a Greek exit, after four months of tortuous bail-out talks that have failed to get both sides closer to a deal to release aid to the country.
But Greece didn’t come up at all during a formal symposium session when finance ministers and central bank chiefs listened to short speeches by leading economists on how to boost growth momentum, a German G7 delegation source said.
A so-called “Grexit” was not a scenario that Moscovici thought likely, however, and he said the Commission was “dedicated” to keep Greece in the euro zone.
Tsakalotos, who has infused a more measured tone into the talks, blamed some of the lack of headway on the hardened stance of the IMF.
“The IMF is being very, very tough on all the issues and not really engaging in proper discussion”, Tsakalotos said.
The United States dollar on Thursday hit its highest against the yen since 2002 while stocks fell after Chinese brokerages tightened margin rules and the IMF head played down talk of an imminent deal to keep Greece afloat. But “one won’t happen without the other”, he insisted.
The Greek government was warned on Thursday that it only had a few days to reach a deal otherwise there wouldn’t be enough time for eurozone parliaments to agree to the disbursal of new loans before the end of the month, when the current program extension ends. “The Greek government has still not made it clear how it intends to make the 1.6-billion-euro repayment, the first tranche of which falls due next Friday”.
‘Any country that doesn’t meet its commitment with the Fund…is declared in arrears and they have no access to IMF funding, ‘ he said, adding that he expected Athens wouldn’t miss any payments.
Greece’s conservative opposition criticized the government’s handling of the negotiation. “We are going into these negotiations with the aim to have an agreement with our partners by Sunday”. But it looks increasingly likely that it will have to compromise.
“In the absence of a quick agreement on structural implementation needs, the risk of an upward adjustment of the risk premia demanded on vulnerable euro area sovereigns could materialise” noted the ECB’s bi-annual financial stability report.
He called for agreement quickly on the broad terms of a deal to avoid the risk of stumbling on hard details at the last moment: “I think waiting until the day or two before whatever the deadline is, is just a way of courting an accident”.
