IMF: Doubts about the 6th tranche?

The PM’s decision to announce a referendum and seek a vote of confidence has caused the reaction of the IMF as well.

IMF General manager Christine Lagarde contacted the representative of Greece to the IMF, Panagiotis Roumeliotis, a while earlier, with information saying that she conveyed the dissatisfaction of the managers of the Fund with Papandreou’s "initiatives". Sources in Washington emphasize that these developments create technical problems for the release of the 6th tranche and the start of the new support program for Greece.

Additionally, the question remains as to what will happen with the planned arrival of the Troika in Athens as protothema.gr has been reporting since earlier in the morning.

Meanwhile, and in response to the failure - as evidenced by the outcome - of the "conventional" IMF interventions in the case of countries such as Greece, which cannot have a flexible "modification" of their monetary policy, the Fund's policy makers are considering creating a new "tool", a six-month "credit line", especially to support States facing fiscal shock, on the sole condition for the granting of this credit that the size of the capitals provided by the IMF do not exceed by five times the share capital of each State to the Fund.

According to the IMF executives, the proposal will be ratified at the G20 meeting in Cannes, where European countries will likely seek funding from other members of the group of the twenty powerful States.

The new IMF tool will not impose many obligations on countries that are financially unreliable, as opposed to loans granted to Greece, Portugal and Ireland, which required major structural changes.