IMF director for Europe Poul Thomsen on Tuesday said the Fund needs an agreement with Greece and European creditors by next week’s Eurogroup meeting, in order to stay on board the program.
"Time is running out but if there is an agreement in the Eurogroup meeting in May, then there will be enough time for us to activate the program and for it to coincide with the remainder of the ESM (European Stability Mechanism) program,” he said.
In a televised appearance on CNBC, Thomsen, who at one point was the IMF’s chief auditor for Greece, added there’s “been a considerable narrowing of differences in recent months … there are still some different assessments of growth over the medium term.”
"Acknowledging that this is an area where there is considerable uncertainty, we are discussing a mechanism for providing more debt relief in case growth is weaker than what our European partners expect," Thomsen said.
The IMF and a handful of Eurozone members – led by Germany -- are at loggerheads over the issue of debt relief for thrice-bailed out Greece. Athens also desperately wants debt forgiveness, with the poll-trailing Tsipras government and the hard left SYRIZA party staking much of their future to the prospect of presenting Greek public opinion with a success in the field.
The EU Commission, meanwhile, has taken a “middle of the road” position.