Wall Street Journal
July 31, 2013
The International Monetary Fund has been playing tough with Greece and the euro zone for a while, and the Fund's latest review of the bailout program, released Wednesday, keeps the bad-cop act going.
The IMF now predicts that an €11 billion funding gap will emerge after next summer, which the Fund previously hadn't expected before 2015. The IMF also says Greece's longer-term debt targets can't be met without further writedowns on some of that debt, which these columns have long endorsed as the only moral way out of the country's bailout hell.
Yet in pushing the European Union and the European Central Bank to forgive some of what Greece's government owes them, the IMF is making a very different kind of case. The IMF wants Athens to stiff Brussels and Frankfurt so that Athens can fully pay back . . . the IMF.
This is rich. The Fund report notes fearfully that "if the program were to go irretrievably off-track and euro area member states did not continue to support Greece, the capacity to repay the Fund would likely be insufficient."