US must block IMF aid for Greece: senators

(WASHINGTON) - The United States should "actively and forcefully" oppose any IMF bailout loans to rescue debt-heavy Greece, two Republican senators urged President Barack Obama on Monday.

In a letter to Obama, Senators John Cornyn and David Vitter said such aid would violate a provision of US law that calls for opposing International Monetary Fund (IMF) loans to countries unlikely to repay them.

The measure requires the US treasury secretary to evaluate loans to countries whose public debt exceeds its gross domestic product (GDP) and oppose them if the potential recipient appears unlikely to pay them back.

"These provisions became federal law for a reason. We sought to prevent US taxpayers' money from again being used by the IMF to bail out foreign nations that have made irresponsible spending decisions," said the senators.

Greece's debt as a percentage of GDP was 127 percent in 2009 and 142 percent in 2010, according to the IMF, and credit default monitor CMA DataVision said that the costs of ensuring against default on Greece's government debt "skyrocketed to record highs this week," the lawmakers said.

"As a result, we believe that it is highly unlikely that Greece will ever be able to repay any loans provided to it by the IMF," they said.

"We request your assurance that the Secretary of the Treasury Tim Geithner will comply fully with Section 1501 of the Dodd-Frank Act by instructing the United States Executive Director at the Fund to actively and forcefully oppose all IMF bailouts of Greece," they wrote.

"We also recommend that you refrain from giving the impression to US allies or global financial markets that the US would act in violation of this provision of law or defy the will of the Congress," said Cornyn and Vitter.