Thursday, June 20, 2013

IMF to suspend aid payments to Greece unless bailout hole plugged

Financial Times
June 20, 2013

The International Monetary Fund is preparing to suspend aid payments to Greece by the end of next month unless eurozone leaders plug a €3bn-€4bn shortfall that has opened up in Greece’s €172bn rescue programme, 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 privatisation 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”.

The shortfall will force eurozone finance ministers to discuss “alternate sources” of funding, said an official, including the possibility of a fresh bailout programme by the end of the year.


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