BERLIN, Aug. 17 (Ed Adamczyk) — The Germany legislature’s pending approval of the Greek bailout may come with strings attached, German Chancellor Angela Merkel said.
She told a radio interviewer Sunday that International Monetary Fund (IMF) chief Christine Lagarde would insure the Fund’s participation if Greece, about to receive its third bailout in five years, lived up to debt relief, austerity and pension reform promises. The assurance could lessen anxieties within the legislature regarding Greece’s potential for actually delivering on its promises in exchange for an 86 billion Euro ($95.6 billion) loan, required by Aug. 20 to help pay a prior loan. The IMF has a reputation for thoroughness and rigor in financial matters.
The Greek legislature approved the conditions, and acceptance of the loan, last week. Each government within the Eurozone must also signal its approval.
“Mrs. Lagarde, the chief of the IMF, made very clear that if these conditions are met, then she will recommend to the IMF board that the IMF takes part in the program from October. I have no doubts that what Mrs. Lagarde said will become reality,” Merkel said in the interview with Germany’s ZDF public broadcaster, attemptting to reassure skeptics within Germany’s legislature.
In July, 65 members of Merkel’s own Christian Democratic Union party voted against any negotiation of a third bailout for Greece and many in the legislature remain skeptical Greece can undertake such comprehensive reforms, areas in which it has failed in the past.
The German legislature is scheduled to take up the issue Wednesday.
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