Speaking ahead of a highly anticipated meeting of IMF, US and European finance officials in Poland, Ms Lagarde said Athens had to re-ignite “the urge to deliver on commitments” made by its government after a period during which “momentum had slowed down”.
“If there has been no implementation, we don’t pay,” she told CNBC, in describing the IMF’s lending practices.
Ms Lagarde’s comments differ from the views of the IMF’s partner in the Greek bail-out negotiations, the European Commission, which EU officials said is largely satisfied with Greece’s recent concessions. These include a property tax that is expected to raise about €2bn this year to fill a €1.7bn gap in the budget.
The eurozone’s finance ministers are expected to decide today whether Greece’s latest concessions are adequate. The move would give political cover to resume negotiations with Athens over the €8bn aid Greece needs to meet government payrolls.
On Thursday Olli Rehn, the Commission’s economic chief, gave the clearest indication yet that he is satisfied with the Greek concessions, telling a news conference that they “go a long way to meeting the fiscal target for this year.”
But officials said some European states, particularly Germany and the Netherlands, remain sceptical of the new Greek commitments and want to review details of the proposals, as well as their revenue assumptions.
“Once we have the numbers based on the technical work we’ll see how much they’ve filled the gap,” said one senior European official. “At least three-
quarters of the gap should be filled for us to send the [negotiators] back.”
A German official added: “We’re keen to see as detailed as possible what the property tax brings.” The official also said Berlin would like to see negotiations resume quickly.
Negotiators for the so-called “troika” – the Commission, European Central Bank and the IMF – left Athens this month following a dispute over how much the Greek government had done to implement promised austerity measures and reforms.
Poul Thomsen, the IMF’s lead negotiator, has yet to return to Athens, with the IMF still concerned about whether Greece has adequately closed budget gaps and made sufficient commitments to reform.
“The IMF is difficult to read because they have internal factions,” said the senior European official.
Officials involved in the process say Mr Thomsen’s return to Athens will be a strong sign in itself that the IMF is ready to sign off the next tranche of lending.
David Lipton, the IMF’s number two official, will attend today’s eurozone meeting, as is routine for such gatherings. But it remains unclear whether the IMF will sign off this week or wait until its annual meeting next week.
The attendance of Tim Geithner, US Treasury secretary, raises the profile of the nominally informal meeting, although officials involved in the process say Mr Geithner has taken a pragmatic line and is offering advice based on the US’s experience with its bank rescue programmes, rather than pushing any particular solution.
Eurozone finance ministers will also attempt to resolve a major hurdle holding up Greece’s €109bn bail-out agreed in July – a demand by Finland that it get collateral in return for its backing of rescue loans.
Officials said the 17 eurozone countries are close to a deal where Greece would offer either shares in state-owned companies or “illiquid” commercial real estate as collateral.
Countries that decided to participate in the collateral scheme would, however, be forced to give up something in return, perhaps lower returns on their portion of the rescue loans.
By Peter Spiegel, Alan Beattie and Joshua Chaffin taken from http://www.ft.com/cms/s/0/b6ded476-dfb2-11e0-8e15-00144feabdc0.html#axzz1Y7iWYH73
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