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IMF to get involved in Greek debt

The European Union flag is seen waving above the ancient Parthenon in Athens, Greece.

TEXT OF INTERVIEW

Steve Chiotakis: Seems like the Greek debt problem's been in the news for months.
Now, countries that use the Euro have agreed on a bailout program for Greece that involves the International Monetary Fund. Marketplace Europe correspondent Stephen Beard is with us live from London with the latest. Hello Stephen.

Stephen Beard: Hello, Steve.

Chiotakis: So tell us a little bit about this package.

Beard: Well we should say first of all it's a blueprint and not a bailout. It's a mechanism for helping Greece if it finds it can't borrow any more money from the markets. Under the deal agreed last night, the 15 other eurozone countries would offer loans to Greece. And crucially, the International Monetary Fund would step in as well and lend emergency funds to the Greeks.

Chiotakis: Now Stephen, help from the IMF, that's usually aimed at poorer, developing countries. I mean isn't that a bit of a humiliation for the Europeans?

Beard: Absolutely, this is hugely controversial. The Germans insisted on it, however. They want outside help -- they don't want their taxpayers to pick up too much of the tab for this. But the French and others feel going to the IMF undermines the Euro. And Simon Tillford of the Center for European Reform thinks they've got a point.

Simon Tillford: It could reinforce the idea that far from being one economy, these are basically sovereign, independent economies. And when it comes to a problem, there is insufficient solidarity within the eurozone to address those issues internally.

Chiotakis: But wait Stephen, what about the Greeks? I mean does this rescue package let them off the hook?

Beard: It brings them some relief, but the pressure is still very much on them to deal with their budget deficit. Because the loans from the rest of the eurozone countries would have to be agreed unanimously. Germany, therefore, has a veto; if the Germans don't feel the Greeks have done enough to cut their debt, the Germans can say, "Nein," sorry, we're not helping out.

Chiotakis: Nein. Yeah, or Ohi as we say in Greek. And it sounds like the Germans are still holding a lot of cards in all this, Stephen.

Beard: Absolutely, the Germans are in control.

Chiotakis: Marketplace Europe Correspondent Stephen Beard, reporting from London. Thank you, Stephen.

Beard: OK, Steve.

About the author

Stephen Beard is the European bureau chief and provides daily coverage of Europe’s business and economic developments for the entire Marketplace portfolio.

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