International Monetary Fund may refuse to help Greece

The International Monetary Fund (IMF) strongly criticized the financial agreement reached between Greece and the rest of the eurozone countries.

The IMF statement said that the reforms that Greece had promised to undertake to receive financial assistance are unrealistic.

According to the IMF, in the next two years Greece’s foreign debt will exceed twice the country's GDP, and the growth indicators of the Greek economy provided for in the agreement are unachievable.

To cope with the Greek debt can only be due to measures substantially beyond those that the European Union is ready to consider, the IMF asserts.

One of the options offered by the International Monetary Fund includes the 30-year grace period for Greece to service its European debt, including new loans, as well as a sharp extension in the loan maturity.

The IMF also offered other options for the release of their crisis, including the cancellation of Greek debts. This is strongly opposed by other lenders of Greece - the European Commission and the European Central Bank.

The International Monetary Fund made it clear that if these proposals are not accepted, it will refuse to further participate in the program of assistance to Greece.

Doubtful reforms

On Wednesday, the Greek parliament should pass four laws on reforms. This is the first condition of the agreement reached by the leaders of the eurozone at the summit in Brussels.

As noted by the economic observer of the BBC, Robert Peston, the statement by the representative of the IMF can greatly prevent the Greek Prime Minister Alexis Tsipras to get approval for the terms of the agreement reached in the Greek parliament.

Reforms opposed by MPs in Tsipras' ruling party include tax hikes and pension cuts. The negative assessment of the agreement by the International Monetary Fund in the eyes of many Syriza MPs makes these reforms even more dubious.

Approximately 10% of Greece’s foreign debt is debt to the International Monetary Fund. Greece has already become the first EU country to miss two IMF payments.

Economic columnist Robert Peston:

European lenders, and above all Germany, forced Alexis Tsipras, apart from his will, to agree to the possible participation of the IMF in granting the next loan package, if the Greek parliament passes laws on economic reforms on Wednesday.

In fact, they told him that Greece would be excluded from the eurozone and condemned to a national catastrophe if he did not accept the IMF and that the IMF would manage its fiscal policy.

The tragicomicism of the situation lies in the fact that the IMF has made it clear that it has no desire to participate in further lending to Greece if Germany and the rest of the lenders do not give up their violent opposition to writing off a large part of the Greek debt.