The International Monetary Fund (IMF) has abruptly withdrawn from formal Greece debt negotiations. The IMF bowed out of talks Thursday in Brussels, Belgium after Athens had refused to offer concessions on labor market and public-pension reforms.
“The ball is very much in Greece’s court,” IMF spokesman Gerry Rice said. “There are major differences between us in most key areas. There has been no progress in narrowing these differences recently.”
Greece, riddled with debt, has been accused of rejecting IMF and European Union (EU) demands to enact a series of financial reforms and enact sharp budget cuts. Both the IMF and EU proposals call for labor market reforms, cuts in state pensions costs and a 1 percent budget surplus in exchange for further financial assistance.
With no further discussions planned, Greece is likely to default on its existing loans in excess of 320 billion Euros.
Beggars can’t be choosers.
Financially insolvent, Greece, now suffering from years of reckless financial mismanagement and bloated public pensions, is in no position to balk at the charity offered by the IMF and EU. Despite rhetoric and promises to rein in the deluge of spending which feeds the Greek national debt, Greece is now recalcitrant over public pensions.
Both the IMF and EU seek to place some limits on the spend-thrift ways to provide a path to become creditworthy. The IMF and EU are repositories of reason and both institutions endeavor to re-introduce the principle and tradition of sound economic policy in Greece.
Athens’ refusal to sanction modest measures at trimming spending with a strident hostility will only prolong the economic misery and force the Greek people to live with uncertainty.
Swift prosecution of needed re-forms and re-structuring might avert disaster. We suggest Greece find the strength to do so.