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IMF Managing Director Christine Lagarde met with Greece’s finance minister this week at an IMF Spring meeting. Athens’ July-deadline for cash is approaching fast, and they desperately need it to service their debts of more than €300 billion in order to avert another default. Therefore they were hoping it would lead to a breakthrough in the bailout negotiations, but the Greeks were left empty handed. After the meeting, Lagarde stated it were “constructive discussions,” but refused questions from Greek reporters.

For the IMF and Europe, the question is now how much more economic pain creditors can realistically impose on Greece without diminishing growth and triggering political instability. The obvious solution is debt relief of which the IMF says is the only way to put it on a sustainable path.

But the debts are held by European institutions, and they are reluctant to loosen the strings. Germany, for instance, remains the biggest obstacle and has forthrightly rejected calls for debt forgiveness, saying such a step would violate European rules and create a dangerous precedent. But also non-European members of the IMF’s board are reluctant to do more without debt relief.

Although Greece has committed to sweeping economic overhauls and spending cuts, it is still in deep trouble, for instance with its €108 Billion in non-performing loans. And then there is that Greek mentality: Greece said on Friday that it achieved a surplus of 3.9 percent in 2016, far exceeding its target of 0.5 percent. Yet IMF officials suspect it achieved the surplus by not paying its bills and other measures that are neither sustainable nor conducive to spurring economic growth.

“We need a package that’s credible, both in terms of the policies and in terms of the debt relief needed to improve sustainability,” said Poul Thomsen, the director of the IMF’s European department. European officials, however, say they are confident a deal can be reached by next month. European Commissioner for Economic and Financial Affairs Pierre Moscovici claimed: “we have the parameters for an agreement in May.”

But a Greek bailout is highly unpopular in Germany, and it is an election year. So it is highly interesting which parameters Moscovici is referring to.