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article imageEuropean Commission denies IMF plans to stop funds for Greece

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By Katerina Nikolas     Jul 23, 2012 in World
A spokesman for the European Commission has denied reports by Der Speigel that the International Monetary Fund (IMF) is planning to cease any further financial aid to Greece.
European Commission spokesman Frederic Vincent denied reports that the IMF is to pull the financial plug on Greece. According to To Vima Vincent said "we have no information about such intentions by the IMF. Anyway, the Fund's contribution to second stimulus package in Greece is relatively small. "
To Vima further reported that sources in the IMF had denied the Der Spiegel report as "nonsense", whilst stressing Greece had exhausted all possibilities of borrowing.
The Greek coalition government must satisfy its Troika of international creditors this week with proposals to cut another 11.5 billion euros from state expenditure, in addition to carrying out structural reforms and selling off state assets. The government has hoped that satisfactory austerity measures may make the Troika look favourably upon requests to extend the terms of the memorandum bailout.
However, as Keep Talking Greece reported German Foreign Minister Guido Westerwelle has ruled out any renegotiation, saying “I see desires emerging in Greece to renegotiate and substantially question the country’s obligations to carry out reforms. I have to say simply, that will not do. It is a Rubicon that we are not going to cross." He further stressed that Greece must honour all its commitments towards reforms.
Even as the report concerning IMF intentions was denied, further reports indicate Germany has also lost patience with Greece and is set to refuse fresh aid. As conflicting reports and denials are bandied it appears that the chance of a Greek euro-exit by the fall are looking increasingly likely, with leaked comments preparing the way.
Ekathimerini reported German Vice Chancellor Philipp Roesler said that a curtailment of international financial aid to Greece would lead to a sovereign default which would in turn lead Greeks to come to "the conclusion that it is probably wiser to leave the euro area.”
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