IMF Europe director Poul Thomsen, of the Fund’s “old hands” in three successive Greek bailouts, on Friday reiterated that the margins for the IMF’s continued participation in the program are tightening.
Speaking in Washington D.C., which this week serves as the world’s focal point for economic developments, given the IMF-WB group spring meetings, Thomsen avoided making specific references on whether already agreed-to austerity measures will be brought forth a year ahead of time in Greece.
Lowering the annual tax-free income tax ceiling and recalculating social security rates – downwards – are two painful measures set to come on line on Jan. 1, 2020. Nevertheless, if creditors deem that fiscal targets will not be met by the Greek state, then the measures will be implemented a year earlier – a prospect that the poll-trailing leftist-rightist Tsipras coalition government wants to avoid at all costs.
A general election is set for autumn 2019, unless the prime minister calls a snap election.
On his part, Thomsen essentially told participants at the meeting that if European creditors want the IMF’s continued involvement in the Greek program they will have to accelerate procedures, such as the pending fourth review of the current and last bailout.
Referring to the issue of Greece’s ballooning external debt, given that the IMF has repeatedly demanded measures to ensure its sustainability, Thomsen said implementation of certain measures can come after the end of the program. He added that a specific mechanism is necessary in order to link them with political conditions.
