The International Monetary Fund is increasing demands for Greek debt relief, setting up another potential standoff with creditors over the country’s bailout, and threatening to create more political and economic uncertainty at an already tumultuous time for Europe. This I.M.F.’s position opens the next act in the long-running Greek debt crisis, casting the fund against Germany and many of the other eurozone creditors. The fund is playing the role of the financial police, adamant that Greece will never return to growth if its debt burden is not sustainable. And Germany is the political pragmatist, leaning on Greece to stick with its austerity commitments lest it set a bad precedent for future bailouts and provoke unrest at home.
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The fund’s position is counter to Germany’s on the wisdom and future of austerity commitments, potentially setting up a conflict with creditors.
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