IMF Walks Out of Greece Bailout Talks
By admin June 14, 2015

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The International Monetary Fund pulled out of talks with debt-stricken Greece on Thursday after it accused Athens of failing to compromise over labor market and pension reforms. The IMF says it is returning to Washington due to a lack of progress in narrowing differences with Athens. Both teams of negotiators reached a stalemate in Brussels and quit talks after months of debate. The breaking point happened due to a document submitted to Greece in recent days, which according to a Greek official was “chock-full of maximalist IMF proposals” that they could not agree to.


IMF spokesman Gerry Rice states, “[t]he ball is very much in Greece’s court. There are major differences between us in most key areas. There has been no progress in narrowing these differences recently.”


Donald Tusk, a former prime minister of Poland and the president of the European Council, attempted to pressure Greek prime minister Alexis Tsipras to agree to terms with its creditors. Tspiras was due to resume talks in Brussels with the European Commission president, concerning ongoing disputes over Athens’ implementation of wide-ranging reforms and steep spending cuts in return for further loans, yet this is now doubtful.


Without the 7.2 billion Euros in its bailout, Greece faces imminent bankruptcy, which could lead to exiting the euro. Yet, unless talks resume, Greece could default on its existing 320 billion Euros of loans. Additionally, Greece will have a difficult time repaying now that the economy has slumped back into a recession.


Until recently, Greece insisted that it would not accept any more austerity measures being imposed by Brussels as the price for more loans. Yet, Greek negotiators have offered some concessions.


There is a possibility of a “Grexit,” a Greek-exit of the EU, which would cause less of a shockwave than it would have a few years earlier. It would also embolden other anti-austerity political parties, such as Podemos in Spain. Yet, this is unlikely. Tsipras has shown a desire to end austerity and stay in the euro.   Additionally, Greek officials believe that Chancellor Angela Merkel of Germany is unwilling to have a rupture in the eurozone on her watch and will draft a compromise pact at the last minute if need be.


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