Today's Coming Crisis Movie

Thursday, May 26, 2011

Greece could be disqualified from IMF cash injection

Greece could be disqualified from claiming part of its next cash injection from the International Monetary Fund (IMF), the chairman of European Finance Ministers has warned.

Jean-Claude Juncker said the stricken country was unlikely to be able to guarantee its funding over the next 12 months, preventing the IMF from releasing funds under its own rules.

"The IMF can only be active when there is a refinancing guarantee for 12 months," Mr Juncker told a conference in Luxembourg.

He added he did not believe that the European Union, European Central Bank and the IMF would decide this condition had been met. He said: "I don't think that the troika will come to this result."

The fresh doubts over Greece's financial aid package caused investors to flee to the safe haven of German bonds. The euro also gave away earlier gains, hitting a two-and-half month low against sterling.

Greece is due to receive a €12bn (£10.4bn) injection from Europe and the IMF on June 29 as part of the country's €110bn bail-out programme. Inspectors from the EU, ECB and IMF are carrying out an audit of Greece's finances ahead of the decision on whether to deliver the next instalment. Although the country has announced a radical programme of asset sales, it has fallen behind its targets for overhauling its finances. (read more)