In the transcript that was released by WikiLeaks on Friday, the conversation suggests that the IMF may try to pressure the European Commission to provide a larger proportion of the debt relief as well as force the Greek government to scrap pension increases that's been at the heart of the stalemate between creditors and Athens. The IMF intends on doing this by threatening to exit from the Troika which could spell disaster going forward however this seems to be a scare tactic that was discussed amongst the three IMF officials who believe such a threat would awaken the European Union from its unrealistic ideals it thinks would be satisfactory to secure stability in the region once again.
This latest developments set off what is expected to be yet another round of back and forth disagreements between Greece and its creditors in an attempt to prevent a crisis. We saw the negative blow to confidence in the global economy when Greece's prime minister Alexis Tsipras fought for weeks over the conditions attached to the renew bailout deal that was eventually agreed upon at a much later date than would've been necessary.
The fight will continue as the deadline to reach a new deal draws closer with July being the cut off, but this time we can look forward to an even bigger resistance from Tsipras with these revelations giving him all the ammo needed to take aim at his nation's creditors. This could be devastating for financial markets as it would bring a new wave of volatility and uncertainty into the mix under tough conditions already being felt.
#Greece demands IMF explanation over leaked debt transcript https://t.co/EPKuq2wDsd
— Pedro da Costa (@pdacosta) April 2, 2016One of the possibly reason's why creditors need to see a resolution soon could be because the referendum vote in the UK over whether to stay in the EU or not taking place on the 23rd June 2016. Many believe that the run up to these elections might interfere with the priority of reaching a conclusive agreement in Greece that wouldn't leave much time for policymakers to draw enough attention to the criticalness of such resolution after proceedings from the elections have wrapped up.
Although it can be argued that the Troika has had more than enough time to iron out its differences with Greece, the previous negotiations have left a bitter taste in their mouth with many leaders taking deep political hits to their credibility. In attempting to devise a plan being fully aware of Tsipras resilient and tempered personality, the IMF has tried to avoid a renewed crisis and in fairness who could blame them.
However Greece's 11th hour crucial decision-making antics have pushed the extremities too far that the European Union has been found complacent in its concessions to allow these political point scoring games to continue for as long as they have.
It could be said that the IMF sees the Greek debt crisis as a perpetual disadvantage for the EU moving forward with the latest revelations indicating their unhappiness at the lack of proper restructuring taking place which puts Europe at risk of economic catastrophe. We've heard that the benefits of an expanded monetary program has reached the end of its time and the need to restructure, in referring particularly to developed economies, is catching up with politicians who have for too long made promises that lack the continuity of more than a generation.
If the EU continues to follow such a path that leads to no ends we could well begin to see the end of the EU itself. And so I leave you with a quote:
"The recipe for perpetual ignorance is: Be satisfied with your opinions and content with your knowledge." ~ Elbert Hubbard
#IMF predicts #Greece's default will coincide with UK's EU referendum. https://t.co/Ic0VnAXSvC pic.twitter.com/Za28kCGaGU— Holger Zschaepitz (@Schuldensuehner) April 2, 2016
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