German report casts doubt on IMF payout for Greece

Reuters

BERLIN (Reuters) - It seems certain the IMF will not pay its share of an aid tranche to Greece at the end of the month but the global lender is likely take part in any new program, a German newspaper reported on Wednesday.

Without quoting any sources, Frankfurter Allgemeine Zeitung (FAZ) said a new bailout program was probably the only way to save Greece from bankruptcy.

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The suggestion in the FAZ report that that IMF would withhold its share of a 12 billion euro tranche due to be paid out to Greece at the end of the month was at odds with what sources have told Reuters in recent days.

"I don't expect the IMF to blink first," one International Monetary Fund (IMF) source with knowledge of the negotiations said this week. "Everyone has an interest in finding a solution. We still have a few weeks."

The euro dipped against the dollar after the newspaper report, before recovering.

"It is by now considered as certain that the IMF will not disburse its share of the next tranche of the current aid program at the end of June," FAZ newspaper wrote without citing sources.

"It is only allowed to do so if the financing of the current program is secured for 12 months. The troika apparently concludes that that is not the case," it added.

The troika of IMF, EU Commission and European Central Bank investigators is expected to complete its mission to Athens this week and then produce a review of the government's progress toward meeting it deficit targets.

Its report will determine whether Athens gets the next aid tranche in June under a 110 billion euro rescue package Greece took from the European Union and IMF a year ago.

A new aid program for Greece would include new conditions for Athens and fresh aid, which the IMF would likely stump up for, the FAZ also said.

(Reporting by Annika Breidthardt, Noah Barkin in Berlin, Paul Taylor in Paris, editing by Mike Peacock)