The Hellenic government asked a new ESM financial assistance program. According to the EU laws the International Monetary Fund can be involved only «where appropriate»
by Emanuele Bonini
Greeks want the IMF out of the negotiating table and out of the Eurozone. This is the idea behind the latest proposal from Greece, as written by the prime minister of the Hellenic Republic, Alexis Tsipras, in a letter sent to the presidents of the European Commissions, ECB and IMF the 30th of June. Together with the measures Tsipras engaged to put in place, the Greek prime minister asked «an extension of the expiring EFSF program and the new ESM loan agreement». The request itself appears to be surprising, since an extension of the expiring program (now expired, and so no longer extensible) would mean to accept the conditions set by creditors. At the same time a new program can mean a financial assistance without the involvement of the IMF. According to the main legal texts of the Economic and Monetary Union (EMU) when a Member State asks financial assistance it necessary table negotiations «between the Commission – acting on behalf of the ESM or the EFSF, in liaison with the European Central Bank (ECB) and, where appropriate, the IMF – and the beneficiary Member State on the possible policy conditions attached to that Member State's financial assistance». Basically treaty say that a direct involvement of the IMF is not automatic. On the contrary, the International Monetary Fund can participate only «where appropriate», which means "whether" appropriate. So, in case the other European Institutions don't consider appropriate to proceed with the IMF, the latter will be out of the game. The Greek latest proposal clearly wants to exclude the IMF from the restructuring of the Hellenic debt, but the problem is countries within the Eurozone don't agree. Especially Germany wouldn't like having a financial program without the IMF, and this represents one of the main challenges for Greece.
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| Chrstine Lagarde, the IMF director |
Greeks want the IMF out of the negotiating table and out of the Eurozone. This is the idea behind the latest proposal from Greece, as written by the prime minister of the Hellenic Republic, Alexis Tsipras, in a letter sent to the presidents of the European Commissions, ECB and IMF the 30th of June. Together with the measures Tsipras engaged to put in place, the Greek prime minister asked «an extension of the expiring EFSF program and the new ESM loan agreement». The request itself appears to be surprising, since an extension of the expiring program (now expired, and so no longer extensible) would mean to accept the conditions set by creditors. At the same time a new program can mean a financial assistance without the involvement of the IMF. According to the main legal texts of the Economic and Monetary Union (EMU) when a Member State asks financial assistance it necessary table negotiations «between the Commission – acting on behalf of the ESM or the EFSF, in liaison with the European Central Bank (ECB) and, where appropriate, the IMF – and the beneficiary Member State on the possible policy conditions attached to that Member State's financial assistance». Basically treaty say that a direct involvement of the IMF is not automatic. On the contrary, the International Monetary Fund can participate only «where appropriate», which means "whether" appropriate. So, in case the other European Institutions don't consider appropriate to proceed with the IMF, the latter will be out of the game. The Greek latest proposal clearly wants to exclude the IMF from the restructuring of the Hellenic debt, but the problem is countries within the Eurozone don't agree. Especially Germany wouldn't like having a financial program without the IMF, and this represents one of the main challenges for Greece.
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