EU-IMF/Greece deal: No strings attached - BBH

Research Team at BBH, suggests that the EU-IMF/Greece deal is more of the same.

Key Quotes

“Over the weekend, the Greek parliament approved numerous measures that tightened fiscal policy. It also adopted a contingency plan if it had not met its fiscal targets in 2018. The EU agreed to free up 10.3 bln euros so that Greece can service its debt, chiefly in official hands.

There has been tension between the EU and IMF over the sustainability of Greece debt. The IMF had called for "unconditional" relief. Germany appeared the most adamant: No. This seemed to be both a principled position as well as a political consideration ahead of next year's election. The IMF capitulated. Rather than debt relief up front, the IMF has agreed to give its blessings to debt relief after the completion of the current program in 2018.

There had been reports that the many of the non-European members of the IMF had been critical of the multilateral lender's exposure to Greece. The major concession made today does not address that criticism. However, a new battle likely will be fought as later this year the IMF will conduct a new debt sustainability analysis and assess before committing new funds.”