Newspapers – EU dispute with IMF burdened debt talks – Reuters Germany

Berlin (Reuters) – Tensions between the International Monetary Fund (IMF) and the EU slow down, according to a media report an agreement in the debt dispute with Greece.

The IMF was the European attitude towards Greece too soft, reported the “Frankfurter Allgemeine Sonntagszeitung”, citing negotiator. The rest Monetary Fund, among others, from the prepared by the EU compromise, according to which Greece can avert the reduction lower pensions when instead reduces its military expenditure. The European Commission, meanwhile, expressed before probably decisive meeting of the Euro Group on Thursday up a gear. “Time is not on our side,” warned Monetary Affairs Commissioner Valdis Dombrovskis in the “world”. Even before opening of markets on Monday progress should be presented, the Journal reported, citing negotiator.

How could a compromise with Greece look, at first, however, remained unclear. The IMF does not accept barter between the reduction of pension and military spending, citing the “FAS” from negotiation circles. Also, the IMF was not prepared to settle for how the European Commission, if necessary with a budget surplus of 0.8 percent in Athens.

The dispute with the EU was the “FAS” According to credit report also the real reason why the IMF back ordered his negotiating team on Thursday to Washington – and not differences with the Greeks, as shown publicly. The IMF has strict rules and must treat all program countries with the same rigor. In the EU Commission therefore reign great skepticism as to whether an agreement at all is still possible, since the EU’s room for negotiation lacks. “It is completely paradoxical,” cited the “FAS” a negotiator. “At the end of an institution decides the fate of Europe, behind which no nation stands.”

The government in Athens is struggling with the international lenders for months to reform conditions for the release of further aid in the amount of 7.2 billion euros. In just over two weeks Greece has to repay 1.6 billion euros to the IMF, over which it does not have. If during Euro-group meeting on Thursday to reach an agreement, however, would still vote over some EU parliaments, including the Bundestag. The talks fail, Greece threaten the state bankruptcy and an exit from the euro.

INSTITUTE – ECB should EMERGENCY AID FOR GREECE TO SET

According to the Kiel Institute for the World Economy, the ECB should provide for a quick end to the crisis in Greece. In an article for the “FAS” IfW President Dennis Snower urged the central bank to cease its relief for the heavily indebted country from the “Emergency Liquidity Assistance” (ELA). Then there were two alternatives: Either accept Greece quickly extensive structural reforms and could stay for a haircut member of the monetary union. Or it’ll be a sovereign default and a controlled Greek exit from the euro.

“Greece should not be allowed to simply declare insolvent, while remaining part of the euro-clubs” writes Snower. “Instead, should the creditors voluntary withdrawal of Greece from the euro ‘buy’.” This would require an extensive debt relief and aid are part of the economic structure. “Such a move would also be a real new start for the rest of the euro zone.”

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