The International Monetary Fund is preparing to suspend aid payments to Greece by the end of next month unless eurozone leaders plug a €3 billion-€4 billion shortfall that has opened up in Greece’s €172 billion rescue program, according to officials involved in management of the bailout.
The gap emerged after eurozone central banks refused to roll over Greek bonds they hold, and comes amid signs that even the scaled-back privatization plan Athens agreed to last year is falling behind schedule.
Officials involved in the Greek talks emphasised that, unlike previous slippages in the bailout, the fault did not lie with Athens but rather in other eurozone capitals. They also blamed privatisation delays on “outside pressures”.
But under IMF rules, governments must have at least 12 months of financing in place to receive IMF disbursements under any bailout program. This latest shortfall means Greece’s financing needs are now only covered up to the end of July 2014.