IMF Fears EU Membership Vote in UK to Paralyze Decision Making

EU leaders will have to work hard on two fronts this summer if they want to keep old traditions within the union. WikiLeaks released information that the IMF fears that a possible Greek default on its debt will coincide with Britain’s referendum on its EU membership and freeze the EU’s decision-making process.

The whistleblowing organization obtained information from a discussion on March 19, 2016, between two top IMF officials — Poul Thomsen, the head of the IMF's European department, and Delia Velculescu, the IMF mission chief for Greece.

The top IMF experts believe that a possible Greek default on its third bailout would coincide with Britain's possible Brexit and it would be hard for the EU to deal with two major events at the same time.

"This is going to be a disaster," Velkouleskou said during the meeting.

According to the leaked conversation, the IMF wants to tell Germany that it will leave the Troika, composed of the IMF, European Commission and the European Central Bank, if the IMF and the Commission cannot reach an agreement regarding the Greek bailout.

The IMF chiefs want Greece to accept more austerity measures, such as raising taxes and cutting pensions. According to the leaked conversation, Greece needs to accept more of these draconian measures or the EU will face the threat of "an imminent financial catastrophe."

However, the Brexit referendum in June "will paralyze European decision making at the critical moment," the IMF officials fear, according to WikiLeaks.

The Greek economy has been severely strained for several years, because of the country's multibillion-euro debt accumulated as a result of the 2008 world economic crisis.

Last August, the Troika approved an 86-billion-euro bailout package aimed at re-building Greece's economy in exchange for reforms and austerity measures.

Meanwhile Britain will vote on whether or not the country should remain in the EU. Supporters of Britain exiting the union argue that EU membership has eroded the nation's independence to make laws, direct its economy and control its national borders. Opponents say that leaving the EU could seriously harm Britain's economy.