Greek officials have invited the International Monetary Fund to join talks with EU creditors on a third bailout for the indebted country. The Athens government aims to complete the deal before its next payment in August.
The leftist Syriza government hopes to secure a bailout worth 85 billion euros ($93 billion), following a preliminary agreement between Greece and its European partners earlier this month.
The European Central Bank, the European Commission and the International Monetary Fund (IMF) have already bailed out Greece twice since the financial crash in 2008. The Greek government had initially planned not to ask the IMF for fresh help, with the fund’s support set to expire next March.
However, Greek Finance Minister Euclid Tsakalotos formally requested a new three-year loan from the IMF on Friday, following an apparent change of course in Athens.
“The Greek authorities have committed to implement a number of policies that would enhance fiscal sustainability, strengthen fiscal stability, sustain long-term growth and, importantly, spread the cost of economic adjustment in a fair way,” the finance minister wrote in the letter to Christine Lagarde, the IMF’s managing director.
In a statement, the IMF confirmed it had received Athens’ request for a loan, adding that it would “discuss with the Greek authorities and with our European partners the timing and the modalities for the discussions.”
Enemies and allies
The Greek parliament has already passed two reform packages demanded by the international creditors, including tax increases and a pensions overhaul, since the controversial deal earlier this month.
“It is our belief that it will take several quarters before the Greek economy faces up to these challenges and returns to a vigorous and sustainable path to growth with fairness and social inclusion,” Tsakalotos said.
While the Greek government has repeatedly criticized the IMF over its allegedly draconian demands, the Washington-based organization is the only major lender pushing for a debt haircut for Greece.
Controls dialed back
Greece needs to reach an agreement with its creditors before August 20, in order to make the next debt repayment of around 3.2 billion euros ($3.5 billion) to the European Central Bank.
The talks on tying up the next bailout are expected to start on Monday in Athens. They were previously scheduled for Friday, but were delayed over “technical issues,” with some reports citing security concerns over the safety of foreign negotiators.
Greece’s economy has shrunk by a quarter since 2010, with unemployment reaching records highs and incomes falling by an average of 40 percent. Many observers attribute a large part of country’s financial troubles to the income cuts and tax hikes demanded by the international creditors.
The stakes have been raised by the recent standoff between the government and European institutions, which prompted the authorities to introduce capital controls on Greek banks.
On Friday, officials eased some of the restrictions, allowing Greek citizens to take up to 2,000 euros ($2,200) out of the country per trip.