BRUSSELS — German reluctance over bailing out Greece has raised the chances that the debt-laden country will be forced to turn to the International Monetary Fund for assistance, possibly by the end of this week.
French and Luxembourg politicians said Monday that European Union nations are discussing a combination of bilateral loans from individual euro-zone countries that want to contribute — and IMF aid for Greece if it needs it.
Greece has around $27.1 billion of debt maturing over the next couple of months and wants to avoid paying sky- high premiums to raise money from international bond markets.
The unusually public divide between German Chancellor Angela Merkel and EU officials backed by France over how to help Greece has kept investors on edge ahead of an EU leaders meeting Thursday.
“A crisis that began over Greece’s borrowing costs is now metamorphosing into a more serious threat to the political and economic order in Europe as a whole,” said Stephen Lewis, chief economist at Monument Securities in London.
Euro-zone governments said last week they would provide Greece with support, likely bilateral loans, if necessary. Greece says it does not need a direct cash infusion but a blueprint for help to convince markets that it will not be allowed to default. That would lower its costs to raise money.
In the past few days, however, Germany has been dashing those hopes — and raising the possibility that the IMF would get involved.
