IMF participation Christian Democrats Call Greek Aid into Question

Germany's government majority in favor of extending financial aid to Greece could collapse if the International Monetary Fund decides to pull out of the current bailout program, an influential Christian Democrat warns.
Quelle: dpa
The IMF regards Greece’s debt level as unsustainable.
(Source: dpa)

The IMF has not yet decided whether it will participate in the current €86 billion ($92.4 billion) financial aid program for Greece, but if it withdraws there can be no more assistance for the Mediterranean country, according to an economic expert from Angela Merkel's Christian Democratic Union.

"Our grounds for a decision are clear. If the IMF withdraws, Germany withdraws," Christian von Stetten, a CDU representative in the German lower house, or Bundestag, told German business weekly WirtschaftsWoche, a sister publication of Handelsblatt Global.

Mr. von Stetten is also chairman of an influential parliamentary group defending the interests of Germany's small and medium-sized companies, known as Mittelstand, which make up the backbone of the country's economy.

At the latest in June, the IMF needed to explain if it will participate, Mr. von Stetten said, adding that he is pessimistic: "The signals have been clearly indicating for a long time that the Monetary Fund no longer considers the basis for the bailout package to be viable."

The IMF regards Greece’s debt level as unsustainable and wants the euro-zone states to offer Athens debt relief, but Germany and some other countries of the 19-nation euro zone strongly oppose a debt haircut, which would mean the other 18 countries pay part of Greece’s debt, foregoing repayment.

Despite the conflict, Euro group head Jeroen Dijsselbloem insisted Thursday that IMF chief Christine Lagarde had promised him that the IMF remained committed to the Greek bailout program. "She reassured me that the IMF still has strong intent ... to participate in the program in full," said Mr. Dijsselbloem.