The International Monetary Fund intends to contribute 18 billion euros ($23.6 billion) in fresh funds to the second aid package for Greece, scaling back IMF help for the nation that triggeredEurope’s debt crisis.
The planned IMF contribution disclosed yesterday represents 14 percent of the 130 billion-euro second rescue of Greece being arranged with the euro area. The IMF accounted for 27 percent — or 30 billion euros — of Greece’s initial 110 billion-euro bailout in May 2010.
“The IMF is trying to manage a difficult balance between staying involved in the rescue package for Greece while limiting the risk to its own funds,” Eswar Prasad, a senior fellow at theBrookings Institution in Washington and a former IMF official, said in an e-mail. The IMF is “increasing its overall exposure to Greece. This poses both financial and political risks for the fund.”
Two years after German Chancellor Angela Merkel insisted that the IMF play a role in aiding Greece and any other distressed euro government, the Washington-based lender has joined the U.S., Canada and other nations in pressing Europe itself to do more to stem the debt crisis.
Germany, the biggest economy in Europe, has repeatedly stalled over bolstering the euro area’s bailout firepower amid skepticism in the country about the merits of aiding euro nations that flouted European budget-discipline rules.
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