IMF to give Greece $23.6b as second aid package

PanARMENIAN.Net - 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 triggered Europe’s debt crisis, Bloomberg reports.

The planned IMF contribution disclosed March 9 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 the Brookings 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.”

The smaller IMF role in the latest Greek bailout leaves 112 billion euros to be provided by the euro area’s rescue fund, the European Financial Stability Facility, which sells debt to finance emergency aid. The EFSF has a capacity of 440 billion euros.

IMF Managing Director Christine Lagarde said that she plans to recommend 28 billion euros in financial aid for Greece to support its “ambitious economic program over the next four years.”