EU and IMF Likely to Agree Deal with Greece

Euro zone finance ministers and the International Monetary Fund are likely to strike a compromise on Greece on Thursday, paving the way for new loans for Athens while leaving the contentious debt relief issue for later, officials said on Monday.

IMF head Christine Lagarde suggested a plan last week under which the Fund would join the Greek bailout now, because Athens is delivering on agreed reforms, but would not disburse any IMF money until the euro zone clarifies what debt relief it can offer Greece.



Underlining the IMF’s willingness to strike a deal after months of wrangling between its European chief Poul Thomsen and the euro zone, Lagarde will attend the ministers’ meeting.

IMF participation in the bailout, even without immediate disbursements, would be enough for the German parliament to back new euro zone loans to Athens, thus ensuring Greece would get enough cash in July to repay maturing debt and avoid default.

“Everyone thinks there is a high probability we will end up with the solution Lagarde outlined,” an official involved in preparations for Thursday’s meeting in Luxembourg said.

via Euro zone finance ministers and the International Monetary Fund are likely to strike a compromise on Greece on Thursday, paving the way for new loans for Athens while leaving the contentious debt relief issue for later, officials said on Monday.

IMF head Christine Lagarde suggested a plan last week under which the Fund would join the Greek bailout now, because Athens is delivering on agreed reforms, but would not disburse any IMF money until the euro zone clarifies what debt relief it can offer Greece.

Underlining the IMF’s willingness to strike a deal after months of wrangling between its European chief Poul Thomsen and the euro zone, Lagarde will attend the ministers’ meeting.

IMF participation in the bailout, even without immediate disbursements, would be enough for the German parliament to back new euro zone loans to Athens, thus ensuring Greece would get enough cash in July to repay maturing debt and avoid default.

“Everyone thinks there is a high probability we will end up with the solution Lagarde outlined,” an official involved in preparations for Thursday’s meeting in Luxembourg said.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza