24 February 2015

Financial Times: IMF, ECB voice concern at Greek reform proposals

Despite the eurogroup approval of Greece's reform proposals, the International Monetary Fund - one of the three bailout monitors - said it was not fully on board with the extension.

In a letter to Jeroen Dijsselbloem, the Dutch finance minister who chairs the eurogroup, Christine Lagarde said the six-page Greek letter does not appear to commit to finishing the existing bailout programme.

"In quite a few areas....including perhaps the most important ones, the letter is not conveying clear assurances that the government intends to undertake the reforms envisaged in the [programme] memorandum," Lagarde wrote in the letter.

Without the IMF on board, Athens could face difficult weeks ahead completing the current bailout programme. Although the IMF rescue is separate from the EU's portion of the bailout, several northern eurozone countries, particularly Germany, have insisted that the EU only disburse aid a the same time as the IMF.

"The IMF will insist on sticking to the mid-term goals" of the bailout, said one senior official involved in the talks. "We're in for very choppy waters."

In a short statement announcing its decision, the eurogroup made clear that while it had signed off on the Greek letter as a "valid starting point" for resumption of the current bailout programme they would continue push Athens to develop the list more thoroughly in the upcoming weeks. Greece faces an April deadline to finalise an agreed list of reforms. 

The European Commission said earlier in the day that it found the Greek letter to be "sufficiently comprehensive".

However in a separate letter to Dijsselbloem, Mario Draghi, president of the European Central Bank – the third of the three bailout monitors – also expressed reservations.

"We note that the commitments outlined by the authorities differ from existing programme commitments in a number of areas," Mr Draghi wrote, saying the ECB would have to "assess during the review" whether they could replace any austerity measures contained in the existing bailout.

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