Greek Exit from Eurozone “Possible,” Admits IMF Chief

Greek Exit from EurozoneGreece’s government officials and representatives of the International Monetary Fund (IMF), European Central Bank (ECB), and European Commission met on Thursday, May 28, 2015 to discuss Greece’s debt situation.

When the meeting finally began, there was no start on drafting a deal because there was still too much to be agreed upon, European Commission officials said. (Source; Reuters, May 28, 2015.)

“We are all in the process of working towards a solution for Greece and I would not say that we already have reached substantial results,” IMF Managing Director Christine Lagarde told ARD television on Thursday, May 28.

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Valdis Dombrovskis, European Commissioner for the Euro and Social Dialogue, said progress was slow and listed a string of issues including pension, labor market reform, and fiscal targets that remained unresolved.

Hardline German Finance Minister Wolfgang Schaeuble went on television to say, “One is hearing all this positive news coming from Greece. That’s nice. But on the substance, we haven’t got much further in the negotiations between the three institutions and the Greek government.”

Greece is optimistic while creditors are not. On Wednesday, May 27, 2015, a Greek government official asserted that negotiators were starting to draft a “staff level agreement.” In Athens, the Greek government has declared that it hopes to strike an agreement with the EU/IMF by Sunday.

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Greece is desperate to receive more funds before it runs out of cash. The Greek government has an upcoming payment of 300 million euros on June 5, 2015 to the IMF. On May 11, 2015, Greece made a payment of 750 million euros to the IMF. (Source: Reuters, May 11, 2015.)

In the last four months, Greece and its creditors have been locked in tense negotiations on a reform agreement without a breakthrough in sight. If Greece and the EU/IMF lenders fail to break through on a deal, Athens risks default or bankruptcy in weeks.