World - IMF Urges EU Leaders to Act Now on Greece Bailout

IMF Urges EU Leaders to Act Now on Greece Bailout
Vittorio Hernandez

Athens, Greece

The International Monetary Fund urged European Union leaders to act immediately on Greece's bailout request or trigger further global crisis.

IMF's acting Managing Director John Lipsk issued the warning on the same day that European finance ministers postponed a decision on the Greek bailout for one month. pending more action on the part of Athens.

Lipsky said the EU leaders are in an uncomfortable crossroad because of uncertainty about the final outcome of their decision on the Greek debt crisis.

The IMF pointed out because the zone's fiscal and financial problems are deeply intertwined, failure by the regional authorities to pursue decisive action could spread the tension created by Greece's situation to the core of the eurozone and may even create global consequences.

Greek Prime Minister George Papandreou reorganized his cabinet to meet the IMF and EU requirements for the release of $17 billion (EUR 12 billion), the second tranche of bailout. He replaced the finance minister with Evangelos Venizelos, the former defense minister, with the hope the cabinet revamp will help get the parliament's nod on belt-tightening measures he proposed. .

The Greek Parliament is scheduled to hold a crucial vote of confidence on Papandreou's government.

If Papandreou survives the confidence vote, he will then ask the parliament to back the latest round of spending cuts worth $37 billion (EUR 26 billion). A parliamentary approval will lead European finance ministers to meet again on July 3 to approve the bailout package, which would likely be released by middle of July.

Employees of a state-owned electric company, to pressure legislators not to back Papandreou's austerity initiatives, went on a 48-hour strike.