Will the IMF’s spring meeting in Washington this weekend be yet another episode in the ongoing Greek debt saga that has mired the euro zone?
After about two months, the talks between Greece and its creditors on the first Greek program review are lagging, as demonstrated by the latest, fruitless round of negotiations that provisionally ended on Tuesday and will resume after April 18. With Greece gradually running out of liquidity, Prime Minister Alexis Tsipras and his Cabinet are beginning to feel the pressure.
The gridlock is due mainly because of differences among the lenders over the country’s projected fiscal shortfall by 2018: It was initially seen at 3 percent by the EU, and 4.5 percent by the IMF. Another sticking point: pushback from Athens on unpopular austerity measures, including cuts in pensions and a rise in taxes.
All eyes will be on how the IMF; European Central Bank; European Stability Mechanism, the euro zone’s bailout fund; and EU will try to come together to avert another Greek crisis. The aim is for Greece and its creditors to reach an agreement by May 1; otherwise, the situation will become unbearably stressful.