Even if the transcript of the conversation is consistent with the publicly stated views of the IMF it is likely to stoke the kind of su ion in Greece and Germany that has long created political hurdles to progress in the Greek debt crisis.
Greece, and many international observers sympathetic to its predicament, will see the IMF officials’ remarks as more evidence that the Fund and the European Union have little regard for Greece’s sovereignty.
The massive spending cuts and tax increases Greece has already implemented in recent years in order to repay its debts have contributed to a massive uptick in poverty and the
highest unemployment rate in the European Union.
Meanwhile, the IMF’s potential threat of withdrawal could exacerbate German su ion of the bailout process. The German public has long been wary of additional lending to Greece, which it believes has failed to reform its profligate government finances or adequately liberalize its economy.
It is also unclear what implications another potential Greek financial standoff will have on the
European refugee crisis, of which
Greece has been on the front line.
Greece is the first entry point for the thousands of refugees flowing into Europe from Turkey and other countries. Tens of thousands of refugees with hopes of reaching more prosperous European nations have been stranded in Greece as neighboring European nations close their borders.
The European Union
reached a deal with the Turkish government on March 18 to return asylum seekers trying to reach the continent by sea in exchange for additional aid to Turkey. They also agreed to an increase in the number of Turkey-based refugees Europe would resettle through a formal absorption process. The plan goes into effect on Monday.
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