Greece’s government says members of the International Monetary Fund’s executive are in disagreement on bailout measures required for the debt-plagued country, further complicating efforts to break an impasse in talks.
Government spokesman Dimitris Tzannakopoulos leveled the accusation Tuesday, hours after the IMF board issued a gloomy statement on Greece’s debt outlook.
The Greek government, he said, is opposed to demands being made by the IMF, including a contingency austerity program after the current bailout program ends next year.
“Our aim is not to yield to the irrational demands of the IMF,” the spokesman said.
Greece needs to agree with the IMF and its European creditors on more reforms in order to keep tapping its bailout program. Although Greece insists it doesn’t have pressing cash needs, without the money, it would eventually face the renewed possibility of default – something that nearly caused it to fall out of the euro bloc in 2015.
But negotiations over Greece’s reforms remain mired in disagreement. The Greek government opposes labor reforms, and the IMF is at odds with European lenders over the extent to which the country’s massive debts should be eased.
The IMF’s statement said that the proposed reforms were supported by “most directors” – suggesting disagreement within the fund. However, the document also noted: “Directors emphasized the need to preserve and not reverse existing labor market reforms … to bring Greece’s collective-dismissal and industrial-action frameworks in line with best practices.”
Unease over Greece’s bailout – and its future in the euro – has been heightened by more widespread political uncertainty in Europe, with anti-EU parties gaining popularity ahead of national elections in key countries, such as the Netherlands and France.
In an interview published Tuesday, senior European Central Bank member Benoit Coeure argued that Greece needed to modernize its economy regardless of what currency it uses.
“Greece’s problems are not linked to its membership of the euro: weak administration, poor social protection, inefficient tax collection, and a highly segmented economy,” he told Le Parisien newspaper.
“The euro reveals the strengths and weaknesses of a country. Greece needs a transformation of its administrative and political structures to prosper in the euro.”