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IMF chief says Greek debt needs to be restructured, not forgiven

By AFP   |   22 February 2017   |   6:45 pm  

(FILES) This file photo taken on April 5, 2016 shows Christine Lagarde, Managing Director of the International Monetary Fund (IMF) and German Chancellor Angela Merkel (L) arriving for a press conference at the Chancellery in Berlin. Christine Lagarde and Angela Merkel met at the chancellery in Berlin on February 22, 2017 where they were expected to discuss the financial aid for Greece.<br />John MACDOUGALL / AFP

Greece’s debt needs to be restructured, the head of the IMF said on Wednesday, but any debt forgiveness by the country’s creditors was not needed for now.

“The amount (of debt) will have to be restructured,” Christine Lagarde, the International Monetary Fund’s managing director, told German television channel ARD after meeting Chancellor Angela Merkel in Berlin.

“At the present time no haircut is needed,” she said, referring to a financial market term for debt write-offs by creditors, adding she had become “much more confident” on the outlook for resolving the Greek debt crisis.

Austerity-hit Greece’s eurozone and IMF lenders have been locked for months in a standoff over debt relief and budget targets.

Greece on Monday agreed to discuss new bailout reforms in a bid to break a deadlock.

But the IMF, which has stayed out of Greece’s huge 86-billion-euro ($91 billion) bailout agreed in 2015 until it gets more guarantees, said more work was needed.

The Europeans have been at loggerheads with the IMF over the Washington-based lender’s demands for easier budget targets, and its concerns over the size of Athens’ mountain of debt which it said previously had to be cut.

Athens needs the latest tranche of bailout cash to meet seven billion euros of new debt payments in July or risk defaulting on its loans.



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