Euro zone bailout fund chides IMF over Greece blog

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[December 13, 2016]  BRUSSELS (Reuters) - The euro zone's ESM bailout fund criticized the International Monetary Fund on Tuesday after senior IMF staff used a blog to criticize the euro zone's demand that Athens commit to a large primary surplus in 2018.

A man walks past Greek national flags and European Union flags on display outside a shop in central Athens, Greece July 24, 2015. REUTERS/Yiannis Kourtoglou

An ESM spokesman said the European institutions were surprised to discover a blog posting on negotiations with the Greek government as new talks were starting in Athens.

"We hope that we can return to the practice of conducting program negotiations with the Greek government in private," the spokesman said.

The head of the IMF's European Department Poul Thomsen and chief economist Maury Obstfeld wrote in an article the Fund believed that euro zone insistence on a Greek primary surplus of 3.5 percent in 2018 was wrong and 1.5 percent would be enough.

The IMF is instead calling for the creation of a reformed welfare system financed with cash from an adjustment of the Greek tax system and far too generous pensions.

(Reporting by Tom Koerkemeier and Philip Blenkinsop; Editing by Alastair Macdonald)

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