Rubbishes claims that the Fund is pushing for a crisis in Greece
April 5, 2016: Christine Lagarde, managing director, International Monetary Fund, in a letter to Prime Minister of Greece said that IMF is keeping a ‘good distance’ from an agreement that would allow for additional loans to Europe’s most indebted state.
This was in reply to a letter by Prime Minister Alexis Tsipras questioning whether his country can trust top IMF officials and continue negotiations with them. His concerns were based on a conference call transcript published by WikiLeaks in which the officials were cited as discussing the possibility of putting pressure on Germany to give Greece debt relief.
“My view of the ongoing negotiations is that we are still a good distance away from having a coherent program that I can present to our Executive Board. I have on many occasions stressed that we can only support a program that is credible and based on realistic assumptions, and that delivers on its objective of setting Greece on a path of robust growth while gradually restoring debt sustainability,” Lagarde wrote in her letter.
She added that any speculation that IMF staff would consider using a credit event as a negotiating tactic is ‘simply nonsense’.
“I agree with you that successful negotiations are built on mutual trust, and this weekend’s incident has made me concerned as to whether we can indeed achieve progress in a climate of extreme sensitivity to statements of either side. On reflection, however, I have decided to allow our team to return to Athens to continue the discussions,” wrote Lagarde.
The IMF has been at loggerheads with auditors from the European Commission over measures needed to be implemented to meet its budget target. Till now, most Euro countries have resisted IMF’s calls for a deeper Greek debt relief while at the same time insisting it should get more involved in the negotiations.
“The IMF conducts its negotiations in good faith, not by way of threats, and we do not communicate through leaks,” she says.
“The team consists of experienced staff who have my full confidence and personal backing. For them to be able to do their work, as you have invited us, it is critical that your authorities ensure an environment that respects the privacy of their internal discussions and take all necessary steps to guarantee their personal safety,” states the letter.