Eleven Latin American nations, led by Brazil, have refused to endorse the IMF’s latest bailout of Greece, which Monday gave €1.7 billion to the beleaguered Mediterranean nation. Governments in Central and South America are angry over being forced to subsidize Greece’s bailout at a time when the money could be better used in their own countries.
Paulo Nogueira Bastista, Brazil’s executive director at the IMF and spokesman for the group of Latin American nations, cited the common belief that Greece will be unable to repay its debts, leaving the emerging nations of the Western Hemisphere on the hook for Greek failures. Recent IMF reports seem to support that view, noting that cost-cutting measures by the Greek government have fallen short, and revenue projections are unrealistic. The IMF now expects the Greek government to need €4.4 billion more next year, over and above the bailout money already given it, and €6.5 billion in 2015, with little prospect of ever paying the money back.
The IMF has asked European creditors to allow Greece to accept lower payouts on old bad Greek debt, which the EU, led by Germany, refuses to do. If debt obligations are not reduced very soon, the frail coalition government is likely to fall. When it does, Greece will plunge into chaos, and out of the EU, negating any prospect of anyone being paid back, even those responsible nations that have been strong-armed into financing Greece’s bad decisions.