Before Brexit, there was Grexit. The European Union’s agreeing to a third bailout programme for Greece last July was a high- drama affair. The spectre of a failure to agree on terms and Greece exiting the EU spooked the markets thoroughly. Now, the transcript of an internal International Monetary Fund (IMF) teleconference, published by Wikileaks, shows that the saga isn’t over—as, indeed, many had predicted at the time.
The IMF has consistently held that further bailouts would simply push Greece deeper in the hole without debt relief. Euro zone leaders had agreed to restructuring at the time, but there has been little movement. The leak showing the IMF leadership ready to all but blackmail German chancellor Angela Merkel on the issue, using the political pressure she is already facing, has predictably raised hackles across the EU. But with the next debt payment due in July and Brexit to deal with before that, the IMF has good cause to be worried.