A Greek referendum on its latest bailout package will hinder the next installment of aid funds from the International Monetary Fund and the European Union, Dutch Finance Minister Jan Kees de Jager said.
“This hinders the planning of the IMF and the euro zone. It creates a problem for the whole sixth tranche,” De Jager told parliament in The Hague late last night. “I can imagine that it will be very difficult for the IMF if there is uncertainty about the sustainability.”
The Netherlands and euro-area countries including Germany and France seek to minimize the damage from a “very unfortunate” referendum called by Greek Prime Minister George Papandreou, Dutch Prime Minister Mark Rutte told lawmakers.
The new round of political turmoil throws into doubt Greece’s ability to access the emergency funding that’s keeping its finances afloat. The IMF’s executive board was due to meet in mid-November to decide on its part of the sixth tranche, which is worth a total of 8 billion euros ($11 billion). Greece has said it has the cash to operate until mid-November.
Papandreou meets in Cannes at about 9 p.m. today with French President Nicolas Sarkozy, German Chancellor Angela Merkel, European Central Bank President Mario Draghi and IMF Managing Director Christine Lagarde before a Group of 20 summit.
Sixth Aid Payment
“After the meetings we expect at least an indication of what will happen with the disbursement of the sixth tranche of the first Greek package,” Juergen Michels, chief euro-area economist at Citigroup Inc. in London, wrote in a note to investors today.
In Germany, the head of parliament’s interior-affairs committee, Wolfgang Bosbach, today told ZDF television he “can’t imagine” that the next tranche will be disbursed without assurances that Greece will meet its commitments under the aid accord.
France and Germany are “also searching for a way out that minimizes the damage from what has happened in Greece,” Rutte told parliament, adding the Netherlands and other euro-area states are putting pressure on Greece to cancel the referendum. Papandreou said the vote will confirm Greece’s commitment to the euro.
After two crisis summits in four days, European Union leaders agreed on Oct. 27 to increase the euro area’s bailout fund to 1 trillion euros, recapitalize banks and convince lenders to write down their holdings of Greek debt by 50 percent.
Lawmakers of opposition parties D66, GreenLeft and Labor, who supported previous euro-region bailouts, last night said they need more insight into the conditions and consequences of the Oct. 27 agreement before they can pledge support.
Rutte’s ruling bloc of Liberals and Christian Democrats relies on Labor to back its European policy as Geert Wilders’s Freedom Party, which last year agreed to support the minority Cabinet, opposes further financial aid to euro countries.