IMF for Greece: Debt restructuring first, money later

IMF for Greece: Debt restructuring first, money later

Athens, July 31, 2015/ Independent Balkan News Agency

By Spiros Sideris

The IMF will not give money to Greece if there is no debt restructuring. We said told them as such in Brussels, said a senior official of the Fund, who briefed journalists in Washington.

Responding to a question of the representative of the newspaper “Ethnos” on Wednesday’s decisions of the Board of the IMF, the official confirmed that the Director General of the Fund Christine Lagarde “authorized the staff of the agency to begin discussions with the Greek authorities on a new loan easing. The relevant authorisation was approved by the executive board of the Fund”, the official said.

It is important to note that the official repeatedly emphasized that the IMF began negotiations with Athens for a new loan under the nonnegotiable term that there will be a debt relief. And for that matter he pointed his finger at the Europeans sending the message that a debt restructure is their matter. At the same time, he warned that the Greek government should make the necessary reforms.

He stressed that “the IMF will enter the program only when there will be the conditions. Debt sustainability is not enough, there should also be the necessary reforms. The Director-General does not wish to bring to the Fund Board a program does not meet the requirements”.

He went on to repeat the obvious, that the program should have secured funding for the next 12 months from the day an agreement is struck between the sides.

In response to questions he appeared unmovable in the position of the Fund on the following: The involvement of the Fund in the Greek program assumes that this will be sustainable in the long term and added that a combination of these two is required. For this to happen today, (eg. a programme sustainable in the long-term) difficult decisions are required from Greece regarding the reforms and the Europeans should take difficult decisions on debt relief.

He also revealed that Europeans appear unwilling to accept a debt reduction if the Greek government does not complete the reforms. He added that the intentions of the Greek government indicate that it will require some time to implement reforms, especially fiscal.

Regarding debt relief, he predicted that there will be a discussion. He said on the matter: “There is an agreement between the EU and Greece that this discussion will take place on a second stage, after the implementation of reforms by Greece”. He noted that “when we go to the second stage and bring the program to the Board for approval, then we will know how and when the debt relief happen”.

For potential new prerequisites before the first installment by the ESM, the official said that this should be decided by the Europeans and hinted that the Greek program with the IMF, ending in March 2016 is not “alive”, as he said that it no longer meets the conditions that had been set.

Referring to the mistakes of the Fund’s officials, he replied that “every experience the IMF acquires it incorporate to its programs, which is done in this phase with Greece. We are fully committed to the Greek program”, he clarified.