White House to Newsmax: Why IMF Must Show 'Flexibility' on Greece
Friday, 29 May 2015 10:23 PM
With Greece due to pay back 1.8 billion euros as the latest
installment of its bailout loan from the International Monetary Fund by
June 30, the White House explained to Newsmax Friday what Secretary of
the Treasury Jack Lew meant when he called for "greater flexibility" on
the part of the institutions involved in resolving the Greek debt
crisis.
In so doing, White House Press Secretary Josh Earnest did not rule out Lew and other administration officials suggesting that the IMF and Greece’s other creditors consider renegotiating their five-year, 240 billion-euro loan to the debt-wracked nation.
Speaking at the London School of Economics on Thursday, Lew fueled speculation with his "greater flexibility" comment that the U.S. was hinting that the three financial institutions should renegotiate the terms under which they rescued Greece from debt and forced exit from the euro currency.
Along with the IMF, the other creditors are the European Commission and the European Central Bank.
At the regular press briefing for reporters at the White House Friday, Earnest told Newsmax that "what [Lew] meant is it’s clearly in the interests of all the parties in these talks to resolve their differences and to come to an agreement that doesn’t create undue turmoil in the financial markets.
"That’s not in anybody’s interests. And he's hopeful that all the parties will be able to sit down in good faith and broker an agreement that satisfies their concerns."
In so doing, White House Press Secretary Josh Earnest did not rule out Lew and other administration officials suggesting that the IMF and Greece’s other creditors consider renegotiating their five-year, 240 billion-euro loan to the debt-wracked nation.
Speaking at the London School of Economics on Thursday, Lew fueled speculation with his "greater flexibility" comment that the U.S. was hinting that the three financial institutions should renegotiate the terms under which they rescued Greece from debt and forced exit from the euro currency.
Along with the IMF, the other creditors are the European Commission and the European Central Bank.
At the regular press briefing for reporters at the White House Friday, Earnest told Newsmax that "what [Lew] meant is it’s clearly in the interests of all the parties in these talks to resolve their differences and to come to an agreement that doesn’t create undue turmoil in the financial markets.
"That’s not in anybody’s interests. And he's hopeful that all the parties will be able to sit down in good faith and broker an agreement that satisfies their concerns."
To make its previous installment of 750 million euros to repay the IMF earlier this month, the government of Greek Prime Minister Alexis Tsipras dipped into the Special Drawing Rights. SDR are special supplementary exchange reserve assets maintained by the IMF for all of its member-nations. In other words, as one reporter who covers the IMF deadpanned, "they borrowed from Peter to pay Peter."
"The problem with the IMF renegotiating is that there are many players involved," Desmond Lachman, American Enterprise Institute scholar and onetime deputy policy director of the IMF, told Newsmax, "A lot of its shareholders would have to go along with any refinancing and already, a lot of them aren’t happy campers over the way the Greek bailout has gone."
John Gizzi is chief political columnist and White House correspondent for Newsmax.