June 17th, 2011
06:31 AM GMT
(CNN) – Part of the backlash against this week's austerity measures in Athens stems from a breakdown in trust between the Greek people and its elected politicians.
But what the Greek government says and does now has little bearing on the country's financial future. As current Creditor-in-Chief the International Monetary Fund is the one setting the terms.
This begs the question: how much support does the Greek bailout have inside the IMF?
Publicly the IMF says it stands ready to continue its support for Greece – subject, of course, to the “adoption of the economic policy reforms agreed with the Greek authorities.” On Thursday the IMF pledged it would release payment in early July that would allow Greece to honor its debt payments through September.
In an e-mailed statement, the fund said that progress was being made in the discussions to ensure the full financing program. The IMF said it “anticipated a positive outcome on this” at the next Eurogroup meeting which will take place in Luxembourg on Monday.
Yet behind closed doors, some economists at the IMF describe the Washington institution’s decision to grant Greece financial assistance in the first place as “deeply unpopular.”
One economist, who wished to remain anonymous, told me they “did not know one single person” among their immediate colleagues in favor of the Greek bailout program.
The economist also expressed concerns that, years from now, the “IMF would be blamed” for whatever happens in Greece. Either way, they said the ongoing financial support for the country was “unsustainable."
The man running for the top job at the IMF also concedes as much.
Speaking to me from Beijing Agustin Carstens, Governor of Mexico’s Central Bank and one of only two IMF Managing Director candidates, said that there would come a point at which handing Greece more money would be counterproductive.
“The difficulty is that if more resources are offered and we don’t reach a point of sustainability then it would not be advisable to provide these resources,” said Carstens.
“Needless to say, adding more resources might make the burden on the country much worse. It would not give us the bang for the buck so to speak.”
The IMF economist I spoke to admitted many inside the fund were unsure whether indeed there was a solution to Greece’s ongoing woes.
“Some would say the hope is that if the can gets kicked down the road for one or two years, say, then Spain and Italy may decouple,” said the IMF economist. “That’s the hope, at least.”
It’s nice to hear those at the IMF have hope but do they any answers?
That’s the question that’s bugging me.
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