The International Monetary Fund (IMF) has said it could be prevented from participating in Greece's third bailout programme, due to the state's debt pile and poor record of implementing previous economic reforms, it has been reported.
This means while IMF staff will continue to participate in current negotiations around the Greek debt crisis, it could be months – potentially even a year – before they're able to sign up to a new programme.
A four-page confidential document obtained by the Financial Times said IMF staff will take part in policy discussions to help ensure the Eurozone's new bailout is in line with what the organisation has in mind.
But it said IMF staff can only decide whether to participate in "stage two" after Greece has agreed on a set of reforms and Eurozone lenders are on board with debt relief, a move that is inconsistent with EU treaties.
Yesterday IMF chief Christine Lagarde said "for any programme to fly, a significant debt restructuring should take place". It thinks Greek debt could surpass 200 per cent of GDP otherwise.
The organisation's position puts it on a collision course with German officials who vehemently oppose any cuts to Greece's debt. They favour re-profiling which analysts say would involve extending the repayment time, without marking down the value of the debt.