What’s the Latest on the Greek Debt Crisis?

Greece’s next dollop of bailout money is caught in an international dispute with no clear resolution. The heavily indebted Mediterranean nation needs the next installment of about 7 billion euros ($7.6 billion) to repay lenders in a few months, but some euro-area governments, notably Germany, refuse to supply more money until the International Monetary Fund comes on board. The IMF, in turn, is refusing to join the creditors’ club until Greece’s debt burden is eased — which Germany refuses to do. Franz Kafka would appreciate the absurdity of the latest twist in the Greek debt crisis, though investors aren’t amused.

1. Isn’t it the IMF’s job to help countries in distress?

Yes, but having come to Greece’s rescue twice in the past, this time it’s hesitating. The IMF says two conditions must be met before it co-finances the country’s ongoing third bailout. First, Athens must agree to a set of credible reforms, particularly of its pension and tax systems. Second, the IMF insists that the euro area ease Greece’s debt burden. While neither condition has been fully met, talks have advanced on the fiscal policies Greece needs to implement to get fresh bailout loans.

The rest of the article can be found on Bloomberg.

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Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.