IMF Loans To Greece Have Preferred Status--Official
Article
By Ian Talley
Of DOW JONES NEWSWIRES
International Monetary Fund loans to the Greek government will be repaid before other creditors if Athens defaults on its loans, including financing from European governments, officials said Thursday.
Financing from European countries will have the same status as existing Greek debt, a European Commission official said.
"Traditionally, IMF debt has been treated as preferred, and secondly, there's no experience of members having losses from their contributions to the IMF," said IMF's Caroline Atkinson.
IMF loans are given senior status partly because they are offered times of crisis, she said.
If European loans are treated the same as existing money borrowed by Athens, and Greece defaults on any portion of the Eurozone's 80-billion-euro bailout package, it may mean that taxpayers from those lending countries may only get a few cents on their euros.
Markets have been worried that Greece will default on its debt, which could then spill over into other EU countries that are also struggling with high deficits. Given that a large portion of Greek bondholders are in Europe, particularly in Germany and France, Greece's economic calamity could exacerbate the Eurozone's ill health if Athens defaults.
-By Ian Talley, of Dow Jones Newswires, 202-862-9285; ian.talley@dowjones.com |
