IMF-European Commission disagree on Greece

IMF-European Commission disagree on Greece

Athens, June 24, 2015/ Independent Balkan News Agency

By Spiros Sideris

Six-month extension the baseline scenario on the table.

Disagreement by the IMF on the philosophy and certain measures proposed by Athens.

Disbursement ‘Express’ planned by Brussels if a deal is agreed, in order to pay the Fund on Tuesday.

Teleconference among heads of institutions.

Greece will be able receive some of the money from the EUR 7.2 billion left over from the bailout program, in order to pay the IMF next week, if it manages to come to an agreement with its lenders, reported informed sources of the EE to MNI, noting however that the Fund remains one of the toughest critics of the country in the negotiations.

The profit of the ECB by the Greek bonds purchased under the SMP program can offer to Greece up to EUR 3.3 bn, more than enough to cover the EUR 1.5 bn owed to the Fund.

A senior official said that as long as there is no agreement between Greece and its creditors by the end of the week, then “the resources from 2014 which may be approved by a political decision of the eurozone finance ministers, may be disbursed within a day. “Some national parliaments will have to be notified of the release, but now it has become more of a political decision”, the source added.

However, the second official argued that as things stand, there are still differences in the approach between the European Commission and the IMF, “even if these were not evident in the statements on Monday”.

“The IMF does not agree with the logic of the Greek proposal, which relies more on taxes than on spending cuts. It does not agree with the special levy on businesses and the increase of the tax to business, while it remaining it remains firm to its position on saving 1% of GDP from VAT and 1% from pension reform”, explained the source.

A third official of the EU said that Tuesday afternoon a teleconference was held between the President of the European Commission Jean-Claude Juncker, the general director of the IMF, Christine Lagarde and ECB head Mario Draghi.

“The ECB is more of a silent partner, but would agree to a proposal to stabilize the situation and restore financial stability”, the source said.

“The European Commission is drawn more to the Greek proposal and agrees that some of the pension reform can be recorded now and be defined in more detail later”, he said.

All three sources noted how creditors work with the belief that on Thursday, when the leaders meet again in Brussels, the IMF will reduce its resistance, small differences in the budgetary calculations of the Greek proposal will be dealt with and Athens will be given a six-month extension.

“The Greek side agrees to a six-month extension based on calculating the remaining amount of financing of the Greek program”, said the first source. “This provided that will be agreed by the IMF”, he added.

Representatives of the Greek delegation under Nikos Pappas, have remained in Brussels and are have marathon meetings with institutions.

“There are some issues regarding alocating categories in VAT reform and additional cuts in the pension system”, said an official, expressing optimism.

He added that if the deal closes, it will be something like a small «Staff Level Agreement» and will regulate the dates of disbursement of the installments that will be accompanied by similar conditions and the required actions.

“We are trying to form a proposal and to divide it into prerequisite actions”, noted the official. “Profits from bonds of the SMP programme from 2015 may be disbursed by the end of July and the proposal can be put to the vote in the Greek parliament as a law, so as to not conduct a vote on the prerequisite of each disbursement.

If there is an agreement in principle, the ministers of the Eurogroup will meet again Wednesday evening to assess the Deal and to send it for final approval by the Council.