News / Economy

    Latin American Countries Refuse to Back New IMF Aid for Greece

    The International Monetary Fund (IMF) logo is seen at the IMF headquarters building during the 2013 Spring Meeting of the International Monetary Fund and World Bank in Washington, April 18, 2013.
    The International Monetary Fund (IMF) logo is seen at the IMF headquarters building during the 2013 Spring Meeting of the International Monetary Fund and World Bank in Washington, April 18, 2013.
    Reuters
    Brazil's executive director at the IMF refused to back the Fund's move this week to keep bankrolling Greece, citing risks of non-repayment, and the Fund itself said Athens might need faster debt relief from Europe.

    The abstention by Latin American states from the IMF decision was revealed by their Brazilian representative in an unusual public statement on Wednesday, highlighting growing frustration in emerging nations with Fund policy to rescue debt-laden Europeans.
     
    "Recent developments in Greece confirm some of our worst fears,'' said Paulo Nogueira Batista, Brazil's executive director at the IMF, who also represents 10 small nations in Central and South America, the Caribbean, Asia and Africa. Batista clarified on Wednesday that he was speaking only for himself.
     
    “Implementation [of Greece's reform program] has been unsatisfactory in almost all areas; growth and debt sustainability assumptions continue to be over-optimistic,” said Batista, criticizing the IMF executive board's decision on Monday to release 1.7 billion euros of rescue loans to Greece.
     
    This raised to 28.4 billion euros ($37.6 billion) the total amount of funds the IMF has so far committed to Greece - an amount that Athens might default on if it gets ditched by its euro zone partners, Batista warned.
     
    He was pointing to a separate report published by the IMF on Wednesday, which said that if Greek reforms derail and European governments withdraw their support, then Athens' “capacity to repay the Fund would likely be insufficient.”
     
    “This statement is one step short of openly contemplating the possibility of a default or payment delays by Greece on its liabilities to the IMF,” Batista said, referring to the Fund's cornerstone policy of barring countries from defaulting on it.
     
    The Europeans and the United States, which have a majority of voting rights at the IMF's executive board, have so far solidly backed Greece. U.S. Treasury Secretary Jack Lew flew to Athens earlier this month to reiterate Washington's support.
     
    Despite having used up almost 90 percent of its 240 billion euro bailout since mid-2010, Athens is still shut out of bond markets and remains in its creditors' emergency ward.
     
    The country's debt sustainability still depends on a pledge by eurozone partners to provide it with further debt relief - on condition that it sticks to painful budget cuts and reforms imposed by lenders that helped cause a crippling recession.
     
    Led by Germany, the eurozone has pledged to consider mild debt cut relief measures for Greece next year, such as extending maturities on its rescue loans, to reduce its debt-to-GDP-ratio to 120 percent by 2020 from a currently projected 124 percent.
     
    The eurozone also committed itself to reduce Greece's debt-to-GDP-ratio further, to “substantially below” 110 percent by 2022.
     
    But Athens may need a faster, bigger debt cut, the IMF warned, to spur investor confidence and achieve the annual growth rates of about three percent which underpin its bailout plan.
     
    “Should debt sustainability concerns prove to be weighing on investor sentiments even with the framework for debt relief now in place, European partners should consider providing relief that would entail a faster reduction in debt than currently programmed,” the report said.
     
    Despite impressively reducing its budget deficit since 2010, Athens must still improve tax collection and cut government waste to hit fiscal targets, according to the IMF.
     
    If not, it will need fresh austerity measures of the kind that would test the cohesion of its fragile coalition government.
     
    “Unless the authorities tackle the problems of revenue administration with much greater urgency in the coming months, a credible 2014 budget would again need to be centered on painful expenditure cuts,” the IMF's mission chief for Greece, Poul Thomsen, said in a conference call with reporters.
     
    According to latest EU forecasts to be updated in its next EU/IMF review, Athens needs to find extra savings of about four billion euros to meet its 2016 fiscal targets.
     
    But Greek Finance Minister Yannis Stournaras told Reuters on Tuesday that the updated forecast might not show any gap at all.
     
    The IMF, however, remained skeptical. There was “no evidence” that Greece's targeted revenue gains from improved tax collection through to 2016 will materialize, its report said. “Achieving the significant fiscal adjustment still ahead in a socially acceptable manner is unlikely to be possible without much deeper public sector reforms.”

    You May Like

    Top US General: Turkish Media Report ‘Absurd'

    General Dunford rejects ‘irresponsible' claims of coup involvement by former four-star Army General Campbell, who led NATO forces in Afghanistan before retiring earlier this year

    Video Saving Ethiopian Children Thought to Be Cursed

    'Omo Child' looks at efforts of one African man to stop killings of ‘mingi’ children

    Protests Over Western Troops Threaten Libyan 'Unity' Government

    Fears mount that Islamist foes of ‘unity' government plan to declare a revolutionaries' council in Tripoli

    This forum has been closed.
    Comments
         
    There are no comments in this forum. Be first and add one

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    London’s Financial Crown at Risk as Rivals Eye Brexit Opportunitiesi
    X
    VOA News
    July 25, 2016 5:09 PM
    By most measures, London rivals New York as the only true global financial center. But Britain’s vote to leave the European Union – so-called ‘Brexit’ – means the city could lose its right to sell services tariff-free across the bloc, risking its position as Europe’s financial headquarters. Already some banks have said they may shift operations to the mainland. Henry Ridgwell reports from London.
    Video

    Video London’s Financial Crown at Risk as Rivals Eye Brexit Opportunities

    By most measures, London rivals New York as the only true global financial center. But Britain’s vote to leave the European Union – so-called ‘Brexit’ – means the city could lose its right to sell services tariff-free across the bloc, risking its position as Europe’s financial headquarters. Already some banks have said they may shift operations to the mainland. Henry Ridgwell reports from London.
    Video

    Video Recycling Lifeline for Lebanon’s Last Glassblowers

    In a small Lebanese coastal town, one family is preserving a craft that stretches back millennia. The art of glass blowing was developed by Phoenicians in the region, and the Khalifehs say they are the only ones keeping the skill alive in Lebanon. But despite teaming up with an eco-entrepreneur and receiving an unexpected boost from the country’s recent trash crisis the future remains uncertain. John Owens reports from Sarafand.
    Video

    Video Migrants Continue to Risk Lives Crossing US Border from Mexico

    In his speech Thursday before the Republican National Convention, the party’s presidential candidate, Donald Trump, reiterated his proposal to build a wall along the U.S.-Mexico border if elected. Polls show a large percentage of Americans support better control of the nation's southwestern border, but as VOA’s Greg Flakus reports from the border town of Nogales in the Mexican state of Sonora, the situation faced by people trying to cross the border is already daunting.
    Video

    Video In State of Emergency, Turkey’s Erdogan Focuses on Spiritual Movement

    The state of emergency that Turkish President Recep Tayyip Erdogan has declared is giving him even more power to expand a purge that has seen an estimated 60,000 people either arrested or suspended from their jobs. VOA Europe correspondent Luis Ramirez reports from Istanbul.
    Video

    Video Calm the Waters: US Doubles Down Diplomatic Efforts in ASEAN Meetings

    The United States is redoubling diplomatic efforts and looking to upcoming regional meetings to calm the waters after an international tribunal invalidated the legal basis of Beijing's extensive claims in the South China Sea. VOA State Department correspondent Nike Ching has the story.
    Video

    Video Four Brother Goats Arrive in Brooklyn on a Mission

    While it's unusual to see farm animals in cities, it's become familiar for residents of Brooklyn, New York, to see a little herd of goats. Unlike gas-powered mowing equipment, goats remove invasive weeds quietly and without adding more pollution to the air. As Faiza Elmasry tells us, this is a pilot program and if it proves to be successful, the goat gardener program will be extended to other areas of New York. Faith Lapidus narrates.
    Video

    Video Scientists in Poland Race to Save Honeybees

    Honeybees are in danger worldwide. Causes of what's known as colony collapse disorder range from pesticides and loss of habitat to infections. But scientists in Poland say they are on track to finding a cure for one of the diseases. VOA’s George Putic reports.
    Video

    Video Wall Already Runs Along Parts of US-Mexico Border

    The Republican Party’s presidential nominee, Donald Trump, gained the support of many voters by saying he would build a wall to keep undocumented immigrants and drugs from coming across the border from Mexico. Critics have called his idea impractical and offensive to Mexico, while supporters say such a bold approach is needed to control the border. VOA’s Greg Flakus has more from the border town of Nogales, Arizona.
    Video

    Video New HIV Tests Emphasize Rapid Results

    As the global fight against AIDS intensifies, activists have placed increasing importance on getting people to know their HIV status. Some companies are developing new HIV testing methods designed to be quick, easy and accurate. Thuso Khumalo looks at the latest methods, presented at the International AIDS conference in Durban, South Africa.
    Video

    Video African Youth with HIV Urge More Support

    HIV, the virus that causes AIDS, is the top killer of teens in sub-Saharan Africa. But many youths say their experience with the virus is unique and needs to be addressed differently than the adult epidemic. VOA South African Correspondent Anita Powell reports.
    Video

    Video Pop-Up Art Comes to Your Living Room, Backyard and Elsewhere

    Around the world, independent artists and musicians wrestle with a common problem: where to exhibit or perform? Traditional spaces such as museums and galleries are reserved for bigger names, and renting a space is not feasible for many. Enter ArtsUp, which connects artists with venue owners. Whether it’s a living room, restaurant, office or even a boat, pop-up events are bringing music and art to unexpected places. Tina Trinh has more.
    Video

    Video Scotland’s Booming Whisky Industry Fears Brexit Hangover

    After Britain’s vote to leave the European Union, Scotland’s government wants to break away from the United Kingdom – fearing the nation’s exports are at risk. Among the biggest of these is whisky. Henry Ridgwell reports on a time of turmoil for those involved in the ancient art of distilling Scotland’s most famous product.

    Special Report

    Adrift The Invisible African Diaspora

    World Currencies

    EUR
    USD
    0.9105
    JPY
    USD
    106.21
    GBP
    USD
    0.7618
    CAD
    USD
    1.3171
    INR
    USD
    67.348

    Rates may not be current.