Eurozone crisis looms as World Bank throws doubt over £2.6BILLION loan to bankrupt Greece

Sunday, April 16, 2017
By Paul Martin

THE future of the troubled eurozone has once again come under the spotlight after the World Bank played down the possibility of handing over billions of euros to prop up the ailing Greek economy.

Sun, Apr 16, 2017

President Jim Yong Kim indicated that securing approval from the bank’s board would be difficult and any discussion regarding a loan would prove to be “lively”.

Greece had approached the World Bank over the possibility of a £2.6 billion (€3bn) loan last month to help it pay for a raft of policies to help boost jobs and growth.

Speaking in London, Dr Kim suggested that the World Bank’s involvement in a bigger financial package was premature.

Any formal discussions about a loan to Greece are unlikely to take place until Athens is able to secure funds from its European creditors to avoid a summer default.

Dr Kim said a World Bank loan would represent a “completely different step for us”, and require the backing of board members including the UK and US, as well as poorer developing countries such as Zimbabwe.

He said: “In terms of providing loans, no decision has made on that yet. And if we were to do that, this would be a decision that would be made from our entire board.

“That would be a completely different step for us, and that would have to be – I suspect – a very lively discussion on our board.”

Greece’s left-wing Prime Minster Alexis Tsipras currently resides over a stagnant economy mired in a recession with more than a million Greeks out of work, with youth unemployment a particular problem with a rate of 48 percent.

The prospect of Greece securing another loan is looking to be problematic as Christine Lagarde, the Managing Director of the International Monetary Fund (IMF) said only last week that it was “only halfway through” talks about the IMF participating in a third rescue package worth a total of £73bn (€86bn).

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