Negotiations between the finance ministers of the Euro Area (Eurogroup) and the International Monetary Fund (IMF) on whether, and under which conditions, the IMF could contribute to the current Greek programme failed to reach a conclusion on Monday. Despite the fact that the Eurogroup had agreed on a set of measures to help alleviate the Greek debt burden in the short term, IMF representatives and the Eurogroup could not reach agreement to get the fund on board with regards to the current Greek programme.

The IMF has repeatedly pointed out that, based on strict conditions and reform requirements, a substantial reduction of the current primary budgetary surplus target of 3.5%, combined with debt relief measures, would be necessary to make the Fund join the programme. However, the Eurogroup maintained its demand of a 3.5% surplus target, contributing to the break-up of the talks. This has triggered demands from leading members of the German Christian Democrats to end the support programme for Greece.

Green financial and economic policy spokesperson Ernest Urtasun commented:

“The IMF is right on fiscal targets and debt relief. It is counterproductive to force Greece into a 3.5% primary surplus until 2020. The risk of medium-term over-indebtedness could kill investment and must be answered with effective debt relief. Those who want to keep the IMF in the programme have to deliver on debt relief now. The cosmetic short-term measures agreed by the Eurogroup will not suffice.”

Green financial and economic policy spokesperson Sven Giegold added:

“The desperately needed rapid reduction of unemployment and poverty cannot be delivered so long as the Greek government is forced to pursue overambitious debt reduction targets, which are criticised even by the IMF. There needs to be effective and fair reforms in Greece targeting a modernisation of the state to overcome clientelism and tax fraud.

“The demand of members of the German Christian Democrats that Germany should exit the Greek programme if the IMF does not come on board is destructive and blind to the need for cooperation. With their strong opposition to any conditional substantial debt relief, the German conservatives want to have their cake and eat it, and are not contributing towards a sustainable way out of Greek crisis.”