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18 May 2015
Leaked IMF memo: Greece on the verge of default
FXStreet (Bali) - A leaked IMF memo on Greece suggests there is virtually no chances of the Hellenic country to meet its debt obligations during the summer period, with European negotiators short of time to come to terms for an agreement with Greece before its next re-payment to the IMF on 5 June, with high risks of being missed, according to the memo.
In the memo dated 14 May, it reads: "“There will be no possibility for the Greek authorities to repay the whole amount unless an agreement is reached with international partners.”
While the IMF memo highlights some progress has been made recently in the tense negotiations between Greece and its lenders, on VAT reform, tax collection and regulations, the time is pressing and the Euro summit in Riga this coming week will be one of the last opportunities to strike a deal that may avert a Greek default on the IMF.
One of the key passages in the IMF document notes, “it was made clear that no disbursement will be made until a full staff level agreement on a comprehensive review is reached”, adding that "while staff emphasised they are not pushing the European partners to consider debt relief, at the same time staff noted the numbers need to add up. In particular it was noted there is an inverse relationship between reforms and sustainability.”
In the memo dated 14 May, it reads: "“There will be no possibility for the Greek authorities to repay the whole amount unless an agreement is reached with international partners.”
While the IMF memo highlights some progress has been made recently in the tense negotiations between Greece and its lenders, on VAT reform, tax collection and regulations, the time is pressing and the Euro summit in Riga this coming week will be one of the last opportunities to strike a deal that may avert a Greek default on the IMF.
One of the key passages in the IMF document notes, “it was made clear that no disbursement will be made until a full staff level agreement on a comprehensive review is reached”, adding that "while staff emphasised they are not pushing the European partners to consider debt relief, at the same time staff noted the numbers need to add up. In particular it was noted there is an inverse relationship between reforms and sustainability.”