Angela Merkel expects IMF involvement

Sunday, Aug 16 2015

German Chancellor Angela Merkel tried to reassure skeptical lawmakers on Sunday that the International Monetary Fund would take part in a new bailout for Greece, before a parliamentary vote in which many of her conservatives may break ranks and reject the rescue. Greece clinched a three-year bailout worth €86bn (£60bn) after parliamentarians in Athens backed the deal, and Germany backed down on its opposition to the third rescue of the bankrupt country in five years.

In her first public comments since her summer break, Merkel told broadcaster ZDF that she was sure Christine Lagarde, head of the IMF, would ensure the participation of the fund if conditions on Greek pension reform and debt relief were met. "Mrs. Lagarde, the chief of the IMF, made very clear that if these conditions are met, then she will recommend to the IMF board that the IMF takes part in the program from October," Merkel said. "I have no doubts that what Mrs. Lagarde said will become reality."

Greece’s next payment deadline is Thursday, when it it needs to repay €3.2bn to the ECB. Eurozone leaders said last week that the first €26bn of the new bailout package will be released on Thursday morning, although Greece would only see half of that immediately, since €10bn would be reserved in Luxembourg for recapitalisation of Greek banks, while a further €3bn would be disbursed over the next two months subject to Athens delivering on its pledges.

Euro is currently being traded around 1.1110 level. Pair is likely to find support around 1.1050 handle and resistance above 1.1160 area. Later today, in the US session, Empire State Manufacturing Index figures are scheduled for a release.

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