European Union Split Over IMF’s Role in Greece

The eurozone’s united stance on not involving the International Monetary Fund [IMF] in bailing-out Greece is weakening.

According to a report by the Financial Times, at least three of the 16-eurozone nations are now open to the idea of calling the IMF if needed.

The three nations in favor of an IMF intervention, in case Greece was unable to meet its debt refinancing over the next two months, are Finland, the Netherlands, and Italy.

The comments came as sources tell Britain’s Telegraph that any IMF loans to Greece would likely be at a rate as low as 3.25%, a full percentage point lower where any bail-out by the EU would be pitched.

The British paper also points out that Michael Meister, Christian Democrat finance chief in the Bundestag and a top adviser to German Chancellor Angela Merkel, said last night that it might be best if Greece called in the IMF.

Telegraph: “We have to think who has the instruments to push Greece to restore access to capital markets: nobody apart from the IMF has these instruments,” Meister said.

The eurozone countries regard the Greek debt crisis as an issue for the euro area. Any involvement in this situation by the Washington-based IMF, which has been providing technical assistance to Greece, would diminish EU’s prestige and shatter the credibility of monetary union. But most importantly, recourse to the IMF would be equal to acknowledging Europe’s incapability in handling its own problems.

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