With much of Monday's regular meeting of the Eurozone's 19 finance ministers likely to be dominated by the aftermath of the Italian constitutional referendum and Prime Minister Matteo Renzi's decision to resign, there are increasing efforts to try and get the IMF on board with Greece's third bailout amid a series of outstanding disagreements between the monetary fund and EU member states.
Economic & budgetary situation euro area steadily improved. Growth is forecast in all countries, debt also started to come down #eurogroup
— Jeroen Dijsselbloem (@J_Dijsselbloem) December 5, 2016
While Greece managed to convince EU creditors in October to release an extra US$3.2 billion (€3 billion) worth of funds by delivering various reform commitments, member states are calling for more wide-reaching reforms and changes to be made to the Greek economy if it is to access the entirely of the US$92 billion (€86 billion) bailout deal.
Currently Athens and the Eurozone states are at loggerheads over labor and energy reforms, along with Greece's 2018 fiscal targets, leaving negotiators with plenty of work to do to try and find a deal.
IMF Involvement
As it stands, the IMF have said they won't take part in the third Greek bailout without a significant reduction in the country's debt, potentially setting up a situation where the Greek bailout could be called into question.
Athens has also been vocal about EU creditors granting the country a debt haircut, however Eurozone states have rejected the idea of writing off Greek debt, setting up another stalemate on the issue.
Schaeuble speaks at banking congress: "Debt cut wouldn't help #Greece, Greece hasn't done enough to carry out needed reforms"
— IChatzopoulos (@chatzo7) November 18, 2016
German Finance Minister Wolfgang Schaeuble upped the pressure on Athens over the weekend, saying that Greece needed to undertake significant structural reforms if it wanted to remain in the Eurozone.
However, these German demands have been rejected by the IMF, who say such actions are unrealistic without significant debt relief.
EU creditors are keen to get the IMF onboard with the Greek bailout by the end of the year in order to avoid a repeat of the Eurozone crisis of 2015, which many believe could be at a greater risk of blowing up as a result of Italy's economic and political uncertainty.
Greek debt still (nearly) off the chart 179.2 percent of GDP _ nearly double eurozone average #Greece https://t.co/aoNuM9KuVJ pic.twitter.com/RMqVwY4iSf
— Derek Gatopoulos (@dgatopoulos) October 24, 2016
Meanwhile, the IMF's absence could also create a political problem, with the German and Dutch parliaments only approving the Greek debt deal on the expectation that the monetary fund would be involved.
There are also fears that any debt relief deal may become much more difficult in the new year, with a number of key European elections taking place amid a growing sense of Euroskepticism and nationalism.
