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The Weekend Neos Kosmos : 9 April 2016
4 THE WEEKEND NEOS KOSMOS | SATURDAY 9 APRIL 2016 DIGITAL.NEOSKOSMOS.COM What did WikiLeaks reveal about Last Saturday, the whistleblowing site published a transcript of a discussion between IMF officials plotting to usher Greece to default. A few days later, it has all but deflated and things are back to business as usual. Here is an account of how things unfolded NIKOS FOTAKIS What is the document that WikiLeaks published? It is a leaked transcript of an intercepted teleconference between the top two International Monetary Fund (IMF) officials in charge of managing the Greek debt crisis. In it, Poul Thomsen, head of the IMF's European Department and Delia Velculescu, the IMF Mission Chief for Greece, appear to discuss a potential Greek default in June, coinciding with the United Kingdom's referendum on leaving the European Union, that could be used as leverage not only to persuade Greece to proceed with the long-overdue reforms and further implement austerity measures, but also to persuade Germany and the European Union to concede to a debt relief for Greece. According to The New York Times, the leak "exposed the fraught behind-the-scenes political machinations that have led to a deadlock on how to deal with a country still regarded as Europe's weakest link". Why would the IMF go through with that? The IMF's involvement in the Greek bailout has been met with much criticism. For non-European IMF creditor countries, the fund's position on Greece as a violation of its policies elsewhere of not making loans to countries with unsustainable debts. An IMF exit would put the bailout in jeopardy and raise the risk of a Greek default in July, when Athens must repay a large loan. The IMF has leverage in pressing Germany to agree, given that the German Parliament might not agree to release funds to Greece unless the IMF participates in the program. But Wolfgang Schäuble, Germany's finance minister, sees "no argument" for acceding to the IMF's demands. How would they do that? One of the tactics used by the IMF is stalling; Thomsen and Velculescu are heard strategising to suppress the IMF's next report on whether Greek debt is sustainable, thus delaying the next stage of the bailout. "In the past there has been only one time when the decision has been made and then that was when [the Greeks] were about to run out of money seriously and to default," says Thomsen in the leaked document, continuing: "And possibly this is what is going to happen again. In that case, it drags on until July, and clearly the Europeans are not going to have any discussions for a month before the Brexits..." That could pose problems for whether Greece receives financial aid from the bailout in time to meet its July debt repayments. How did the Greek government react to the leak? The revelation was met with a combination of fury and incredulity in Greece. The Greek government reacted swiftly, with the Greek PM, Alexis Tsipras, sending a letter to the IMF head, Christine Lagarde, expressing his concerns and asking "whether [Thomsen and Velculescu's] position reflects the official IMF view", as well as whether "Greece can trust, and continue negotiating in good faith with, IMF officials who express views such as those expressed in these publications". How did the IMF respond to the accusations? Christine Lagarde wrote a letter of her own, addressed to Alexis Tsipras, which, in a widely symbolic gesture, she made public, uploading it on the IMF website. In it, she dismisses "any speculation that IMF staff would consider using a credit event as a negotiating tactic" as "sim- International Monetary Fund (IMF) managing director Christine Lagarde. PHOTO: EPA/BORIS ROESSLER.
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