German lawmakers to drop support for Greece bailout if IMF quits: senior MP

Tue Feb 21, 2017 1:41pm EST
 
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By Michael Nienaber

BERLIN (Reuters) - German lawmakers will not back further financial support for Greece if the International Monetary Fund withdraws from Athens's bailout program, the deputy parliamentary floor leader of Chancellor Angela Merkel's conservative bloc said.

Greece needs a new tranche of financial aid under its third bailout program by July to meet its debt repayments.

But the IMF says Greece also needs substantial debt relief to make its public finances more sustainable, while Germany, one of Athens' biggest creditors through the euro zone's rescue mechanism, opposes such a step.

Asked if there could be any scenario under which the German Bundestag, or lower house of parliament, would support the bailout without IMF participation, Hans-Peter Friedrich told Reuters in an interview on Tuesday:

"No chance. This was an explicit condition for the third bailout program."

"Without IMF participation, there won't be any further assistance loans. The IMF must stay on board," said Friedrich, a member of the Christian Social Union (CSU), the Bavarian sister party of Merkel's Christian Democratic Union (CDU).

Berlin has long argued that the IMF's expertise and independence are crucial to make Greece's third bailout, worth up to 86 billion euros ($91 billion), a success.

The Fund's continued involvement will be the main issue on the agenda on Wednesday when IMF Managing Director Christine Lagarde meets Merkel in Berlin.   Continued...

 
A piggybank painted in the colours of the Greek flag with a 20 euro banknote in it's slot, stands amongst various euro coins in this picture illustration taken in Berlin, Germany June 30, 2015. REUTERS/Pawel Kopczynski