IMF close to giving up on Greece after official admits bail-out negotiations are ‘not working’ and the country ‘prepares to default on next debt repayment’ 

  • IMF Europe head says bail-out negotiations with Athens are 'not working'
  • Some Greek officials appear to be preparing themselves for a default
  • Eurozone member is beginning to run out of time for making fiscal reforms
  • Finance Minister said country was committed to changes at last repayment 

By Callum Paton For Mailonline and Louise Eccles and Hugo Duncan In Washington For The Daily Mail

Published: 08:42 EST, 14 April 2015 | Updated: 19:20 EST, 14 April 2015

Fresh fears were raised last night that Greece could exit the eurozone after it was claimed negotiations with its European creditors were ‘not working’.

An official at the International Monetary Fund reportedly admitted that he cannot envisage a successful conclusion to the country’s bailout.

Greece this week repeated threats to stop paying off its loan and default on its debt if Europe refuses to release more funds.

Thomsen's prediction was made as the Greek government repeated previous threats that unless more bail out money was made available then it would stop paying back creditors

Thomsen's prediction was made as the Greek government repeated previous threats that unless more bail out money was made available then it would stop paying back creditors

This would make it harder for the country to remain in the eurozone, although no state has ever left and there is no official exit process. 

Poul Thomsen, the IMF's Europe Director has been quoted by the Greek media as saying he could not see a successful conclusion to the country's current bail out.

The fund's Europe chief reportedly told his executive board that negotiations were not going as hoped, the Daily Telegraph reported.

Thomsen's prediction was made as the Greek government repeated previous threats that unless more bail out money was made available then it would stop paying back creditors.

One Greek official has been quoted by the Financial Times as saying that if the European Central Bank did not play ball with the Mediterranean Eurozone member there could be no alternative to a default.

Mr. Thomsen also issued a warning over Greece's recent, weak economic performance. He met with Greece's finance minister Yanis Varoufakis earlier this month.

Greece repaid a roughly €450 million loan instalment to the International Monetary last week but Athens' financial problems, as outlined by Mr. Thomsen, have renewed fears the country might miss the IMF payment of €200m payment on the 1st May and another for €745m 11 days later.

This could lead to he EU member being forced, eventually, to leave the eurozone.

The IMF debt stems from Greece's international bailout, under which the country was extended €240 billion in rescue loans from other eurozone countries and the IMF to prevent bankruptcy.

Greek finance minister Yanis Varoufakis (left) met with Mr. Thomsen who expressed worry over the Greek economy
Prime Minister Alexis Tsipras' (right) government has been talking with creditors since January

Greek finance minister Yanis Varoufakis (left) met with Mr. Thomsen who expressed worry over the Greek economy. Prime Minister Alexis Tsipras' (right) government has been talking with creditors since January

Varoufakis has said that Greece is committed to making its repayments and accepts the fiscal restrictions imposed on the country but within reason.

He said at a conference last week that Greece was 'not going to sign on the dotted line of anything you give us just to get the next loan tranche', 'At the very same time,' he added, 'we need to have a fiscal plan that makes sense. At the moment Greece is committed.'

However,Greece's new left wing-led government which has been locked in strained negotiations with creditors since winning elections in January continues to hold its recent election victory over the international community. 

Varoufakis has said that Greece is committed to making its repayments and accepts the fiscal restrictions imposed on the country but within reason

Varoufakis has said that Greece is committed to making its repayments and accepts the fiscal restrictions imposed on the country but within reason

Greece's defence minister Panos Kammenos, whose right-wing Independent Greeks party props up the country's socialist government, said they had a mandate to rule. 

'Even if elections take place, we will double our share of the vote,' he told Greek TV. 

Greece has been given until 20 April to clean up its finances and set in place a number of economic reforms, necessary if it is to receive further rescue money. 

There is seemingly a great deal to be done if the country is to meet creditors' expectations. The IMF will meet in Washington this week and Yanis Varoufakis is due to meet President Obama on Thursday.

Greece has been given until 20 April to clean up its finances and set in place a number of economic reforms, necessary if it is to receive further rescue money

Greece has been given until 20 April to clean up its finances and set in place a number of economic reforms, necessary if it is to receive further rescue money

 

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