No IMF decision on Greek bailout until autumn

There is strong support at the IMF for joining a new bailout package for Greece but the fund will not decide whether to participate until autumn, Sweden’s representative to its executive board told a newspaper.

The International Monetary Fund has been part of Greece’s first two financial rescues, but doubts have been raised about its commitment to a third package.

The European Commission said on Friday the Fund was participating fully in bailout talks between Greece and its international lenders that started in the last week of July.

A day earlier the Financial Times, citing a summary of an IMF board meeting, said the Fund could not officially join the talks until after Greece agreed comprehensive reforms.

Thomas Ostros, who is an alternate – or replacement – director on the fund’s 24-member board, said there was “strong (IMF) support for being part of a new loan program, but it will take time,” according to an interview in Thursday’s edition of Swedish daily Dagens Nyheter.

“There is going to be a discussion during the summer and autumn and then the board will make a decision during the autumn,” he said.

Athens is seeking up to 86 billion euros ($94.5 billion) in aid in what would be its third bailout since 2010.

Ostros, a former government minister, said there was a risk a new package would simply delay the day of reckoning unless Greece adopted painful reforms.

“It can not be something that is forced on them. Greece must own the problem. The Greek government is not there yet,” he said.

“…They have an inefficient public sector, corruption is a relatively big problem and the pension system is more expensive than other countries.”

source:Reuters