IMF and Germany at loggerheads over Greek debt

The terms of Greece’s third bailout plan still have to be ratified by seven national parliaments, La Razón reports. While the Lithuanian government has formally supported the aid programme for Greece, the German government is attempting to defuse opposition over plans for a new €86 billion bailout package for Greece, with Finance Minister Wolfgang Schäuble, formerly a strong critic of Greece, amongst those now stating “I am fully convinced that it’s the right decision to vote in favour of [the bailout]” – although he admits, in an interview with ZDF, that his decision in support of the Greek third bailout has not been an easy one.

Concern has been raised in some quarters that the IMF has not as yet signed up for the bailout plan, the WSJE notes, and Germany has made the participation of the IMF a precondition for its own loans. “The participation of the IMF remains indispensable,” German finance ministry spokesman Marco Semmelmann is quoted as saying by the WSJE – a comment echoed by Commissioner Günther Oettinger who said “we still need it,” as reported by various European media.

The situation, Het Financieele Dagblad comments, has become a tug-of-war between IMF Chief Lagarde, who cannot give a new credit to a country with a debt of 200% of GDP, and German Chancellor Merkel, who needs the IMF participation for the reassurance of the right-wing of her parliament. The German right-wing, Le Monde reports, is indeed still opposed to any cut on the Greek debt and, according to the Daily Mail, Angela Merkel is facing her largest ever backbench revolt in a parliamentary vote on the Greek bailout tomorrow as she is trying to persuade members of her CDU/CSU group to back the € 86 billion deal – German Finance Minister Wolfgang Schäuble has also urged CDU MPs to back the accord with Greece, Rai News 24 notes.

In July, 60 CDU/CSU members voted against the Greek rescue plan, and Bild – quoted by De Tijd – predicts that the number could reach up to 120 members tomorrow. While Angela Merkel fears that more than 65 CDU deputies may vote against the agreement, Eleftheros Typos believes, as does La Repubblica, that it is certain that the German parliament will give its green light to the Greek programme.

For Süddeutsche Zeitung’s Claus Hulverscheidt, Christine Lagarde’s “implausible” call for a debt cut is proving she is manoeuvring. Saying it won’t decide before the autumn, the IMF has decided to play for time, Le Figaro further stresses. As to Greek MPs, they are poised to hold a vote of confidence in the government of Alexis Tsipras, The Daily Telegraph reports, as Leftist party rebels deserted the Prime Minister over the punishing terms of a third international bailout agreement.

For Mega TV, the countdown for the elections has already begun; as soon as the ratification of the Memorandum by the German Parliament is completed on Wednesday, the Maximos Mansion will set in motion the plan for early elections, all Greek media extensively report.