In Athens, walls have ears.
The leaking of a conference call of International Monetary Fund officials on Greece’s latest bailout review has further undermined mutual trust in fraught debt talks, embarrassed the European Commission and infuriated the IMF and Germany.
At stake are the IMF’s reputation as a stern enforcer of financial rescue programs meant to make indebted states viable and the European Union’s determination to hold the euro zone together and avert another damaging Greek crisis.
Greek Prime Minister Alexis Tsipras exploited the leak at home to demonize the IMF, rally his left-wing Syriza party ahead of more painful sacrifices to secure the next slice of European loans, and try to put his conservative opponents in a corner.
But efforts to drive a wedge between the EU institutions and the IMF, and isolate IMF Europe director Paul Thomsen, a veteran of six years of acrimonious negotiations with Athens, fell flat.
“Each time Tsipras is going to have to compromise, he needs to create an external enemy,” said George Pagoulatos, professor of European politics and economy at Athens University. “It’s part of his old populist playbook.
“It’s smart domestic politics even if it is dumb diplomacy.”
After a transcript of the March 19 conversation was posted on Internet site WikiLeaks, Tsipras demanded the IMF explain whether it was plotting to push Greece to the brink of default to make it swallow harsher austerity measures. The text offers little support for such accusations, although the IMF officials do note that Athens only compromises when it runs out of money.
IMF Managing Director Christine Lagarde made clear whom she held responsible, backing her staff and writing to Tsipras: “It is critical that your authorities ensure an environment that respects the privacy of their internal discussions and take all necessary steps to guarantee their personal safety.”
The leak highlighted known differences between the IMF and the EU over the state of Greece’s third international bailout since 2010, and over how much more Athens needs to do to meet its fiscal targets and make its debt sustainable.
More damagingly, it laid bare the IMF staff’s contempt for the European Commission, seen as too soft on the Greeks.