German SPD says Europe can back Athens without the IMF

The SPD claims it never agreed with the IMF's participation in the Greek bailout. IMF chief Christine Lagarde is here pictured with German Chancellor Angela Merkel. [International Monetary Fund Follow / Flickr]

In an interview with Süddeutsche Zeitung, Social Democratic Party of Germany (SPD) deputy chairman Carsten Schneider insisted that the International Monetary Fund’s (IMF) participation in the Greek bailout was not necessary. EURACTIV Greece reports.

“We need the IMF for its estimates and independence […] but not as a lender,” Schneider noted.

“As Europeans, we have the European Stability Mechanism (ESM), we are able to find funds in the capital markets,” he added, stressing that the current bailout program can be funded without the IMF.

Germany and US wage 'silent war' over Greece

A leaked telephone conversation, and the reactions which followed, revealed a “silent war” between the United States and Germany over the Greek crisis, with Athens’ leftist government finding itself more in tune with Washington than Berlin.

The Syriza–led government has always opposed the IMF’s participation in the bailout, criticising its firm stance in the negotiations.

A few days before the controversial Greek referendum in July 2015, then Minister of State Nikos Pappas stated that Europe could continue “without the IMF”.

“Europe has the institutional dynamic to find solutions for the crisis without the IMF,” he noted.

On the other hand, Berlin has insisted since the very beginning of the Greek crisis that the IMF should remain part of the Greek programme.

The German centre-left politician also said that IMF’s involvement was an explicit desire of the conservatives, an idea which was not shared by his party.

In a recent interview also with Süddeutsche Zeitung, German finance minister Wolfgang Schäuble floated the idea that if the IMF decides to pull out, Europe could figure out its “own solution” within the eurozone.

Schäuble: If IMF exits Greek bailout, EU could take over

Berlin is weighing up the possibility of the EU taking over the Greek bailout in the event that the International Monetary Fund decides to end its role in it, German Minister of Finance Wolfgang Schäuble said on Friday (13 January). EURACTIV Greece reports.

He added that such a solution should guarantee a strict implementation of the bailout’s terms and be approved by the German parliament.

“If we continue solely then we will have to better guarantee the agreements […] this role could be assigned to the ESM,” he emphasised.

Commission sources cited the ESM Treaty when asked to comment on the matter.

“The European Commission – in liaison with the European Central Bank (ECB) and, wherever possible, together with the IMF – shall be entrusted with monitoring compliance with the conditionality attached to the financial assistance facility,” a Commission official told euractiv.gr.

What Athens says

Meanwhile, the Greek government seeks to conclude the second review of the country’s bailout will at a Eurogroup on 26 January.

Speaking yesterday (18 January) at the parliament, Greek Prime Minister Alexis Tsipras said that the IMF could remain in the programme but just as a technical adviser.

Commenting on the future relations between Athens and the Fund, Greek Finance Minister Euclid Tsakalotos ironically said: “If we continue to exceed our objectives and the IMF continues to make wrong predictions [on the Greek economy performance], all we can do then is to provide them with technical assistance”.

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