Emerging markets warn IMF over fresh Greek loan plan

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Emerging markets warn IMF over fresh Greek loan plan

Michael Burke points to this FT article, and argues “As the BRIC representatives say, the cuts are too harsh and the losses for bondholders too small. Politically, as well as economically, the rise of the BRICs is a major benefit. Progressive forces in Europe (including Britain) and elsewhere should increasingly look to them. Not only is it possible to learn from their rapid growth, but it is also very valuable to have them as allies in the interests of the overwhelming majority of the population of Europe”

Representatives of leading emerging market countries at the International Monetary Fund have warned the fund’s management against pouring more large sums of money into another Greek bail-out with uncertain prospects.

The officials said that – several days after a new financing plan from the eurozone authorities – its details were unclear and a proposed reduction in private sector holdings of Greek debt appeared to be inadequate.

Interviews with the Financial Times, along with private conversations with other representatives from non-European economies, reveal several governments unwilling to risk financial contagion by curtailing IMF lending to Greece, but alarmed at the risks the fund was taking.

Concern among shareholder countries on the fund’s executive board poses a challenge to Christine Lagarde, the IMF’s new managing director, who soon must decide how much more money she recommends is lent to Athens.

Paulo Nogueira Batista, who represents Brazil and eight other countries on the IMF’s executive board, said the Greek government’s austerity plan was too tough and the restructuring of Greek debt held by European banks was too small.

“Greece is not having an easy time,” he told the FT. “The mostly European private creditors of Greece have had an easy time.”

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Donagh is the editor of Irish Left Review. Contact Donagh through email: dublinopinionAtgmail.com