Source: Zero Hedge

Counting all IMF funding sources, the 15 euro-zone nations would be responsible for a substantially larger stake in the institution's Greek bailout than the U.S. European contributions to the IMF loan, of course, will in turn be dwarfed by euro-zone countries' far larger exposure through the European bailout.

To make its loan, the IMF will borrow from the U.S. Federal Reserve and the other central banks it taps and pay them interest of about 0.25% on the money; the IMF will then charge Greece about 3% on the loan.

Will the money be wasted? That depends on whether the Greek electorate swallows the cuts in salary and pensions required by the IMF and the country's European partners and whether a new economic strategy boosts Greece's competitive position.

The IMF is always at the top of any list to be repaid because its blessing is crucial for any country to be able to borrow internationally. If there were to be any losses on Greek loans, IMF policy is to absorb them rather than passing them on to members.

In announcing the payment, part of a 110 billion euro IMF-European Union bailout package crafted for Greece last year, IMF Managing Director Christine Lagarde pointed to progress being made by debt-laden Greece, though noting that more work remains.

"The program is delivering important results: the fiscal deficit is being reduced, the economy is rebalancing, and competitiveness is gradually improving," Lagarde said in a statement.

"However, with many important structural reforms still to be implemented, significant policy challenges remain. A durable fiscal adjustment is needed, lest the deficit get entrenched at an unsustainably high level, and productivity-enhancing reforms should be accelerated, lest growth fail to recover," she said.

The IMF has warned that the crisis in Greece could reach countries like the United States through money market funds, especially if the contagion spreads to European banks heavily exposed to Greek debt.

The global lender scheduled its meeting to consider the fifth loan disbursement for Greece after euro zone leaders agreed on Saturday to release their portion of the 12 billion euros due to be paid to Athens from the initial bailout.

Lagarde said Greek authorities had made progress in the fiscal area by identifying measures required to reduce the general government deficit to less than 3 percent of gross domestic product by 2014.

She also lauded the government's privatization strategy and noted that while the plan to sell 50 billion euros of state assets by 2015 is "very ambitious, the establishment of an independent privatization agency should help realize transparent and timely implementation."

Still, more work needs to be done, Lagarde said.

"To strengthen Greece's competitiveness, structural reform implementation needs to be accelerated. This will help achieve synergies, such as between privatization and reducing administrative barriers to investment. The reform agenda should be expanded to address Greece's high labor tax wedge and inefficient judicial system," Lagarde added.