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IMF, EU Working With Greece on Swift Financing Accord

IMF’s Strauss-Kahn with German Chancellor Merkel in Berlin: “We have to face a difficult situation. We are confident we can fix it” (photo: Steffen Kugler/AFP)

GREEK FINANCING NEGOTIATIONS

IMF, EU Working With Greece on Swift Financing Accord

IMF Survey online

April 28, 2010

  • Strauss-Kahn meets German leaders to discuss Greek financing proposals
  • Says Greek situation can be fixed but needs to be rapid
  • Greece committed to do what is needed

IMF Managing Director Dominique Strauss-Kahn said it was critical to reach agreement with Greece swiftly on a strong economic program and associated financing package and so restore market confidence.

“The faster the better . . . We have to face a difficult situation. We are confident we can fix it. We are asking from the Greek government very bold measures but they are committed to do what is needed,” Strauss-Kahn said at a press conference in Berlin on April 28.

“If all this goes together rapidly, I'm very confident that the problem will be fixed. But if we don't fix it in Greece it may have a lot of consequences for the EU,” he added.

European Central Bank President Jean-Claude Trichet said he was confident that negotiations would be concluded soon. Then it would be up to governments and the IMF to approve the financing package quickly.

Talks in Berlin

The IMF Managing Director held talks with German Chancellor Angela Merkel, as well German Finance Minister Wolfgang Schaeuble, ECB President Trichet, and German lawmakers to discuss the economic situation in Athens.

"It's quite clear that the negotiations between the Greek government, the European Commission, and the International Monetary Fund must be accelerated and we hope that they can be concluded in the coming days," Merkel told reporters in Berlin.

The European Community and the International Monetary Fund are negotiating with the Greek authorities the conditions for a multibillion euro loan package. ”Of course it's difficult because what is being done by the Greek government and the Greek people is very difficult,” Strauss-Kahn emphasized.

“The international community is here to help them so that they can return to normalcy. Not rapidly. It will take time; I don't want to hide behind a rosy picture. It's not easy. It's difficult.”

Wider repercussions

“What is at stake today,” the IMF Managing Director said, “is the economic situation of Greece, but it's more than that, it's the confidence that's at stake. That's why we need to act swiftly and strongly.”

Strauss-Kahn stressed that the financing package would be a loan that would be repaid over time. “It's not grants. It's loans.”

Strauss-Kahn had met Greek Finance Minister George Papaconstantinou in Washington on April 25. At that time, the Managing Director said that discussions with the Greek authorities had accelerated. “The IMF, the European partners, and everyone involved in the financing effort recognize the need for speed. I am confident that we will conclude discussions in time to meet Greece’s needs.”


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