Today's Coming Crisis Movie

Friday, June 17, 2011

Greek crisis divides IMF opinion

Part of the backlash against this week's austerity measures in Athens stems from a breakdown in trust between the Greek people and its elected politicians.

But what the Greek government says and does now has little bearing on the country's financial future. As current Creditor-in-Chief the International Monetary Fund is the one setting the terms.

This begs the question: how much support does the Greek bailout have inside the IMF?

Publicly the IMF says it stands ready to continue its support for Greece – subject, of course, to the “adoption of the economic policy reforms agreed with the Greek authorities.” On Thursday the IMF pledged it would release payment in early July that would allow Greece to honor its debt payments through September.

In an e-mailed statement, the fund said that progress was being made in the discussions to ensure the full financing program. The IMF said it “anticipated a positive outcome on this” at the next Eurogroup meeting which will take place in Luxembourg on Monday.

Yet behind closed doors, some economists at the IMF describe the Washington institution’s decision to grant Greece financial assistance in the first place as “deeply unpopular.” (read more)