Lagarde demands decisions on Greek debt relief now

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IMF Managing Director Christine Lagarde has demanded the technical details of Greece’s debt relief be decided now, whilst the extent of debt relief be decided in 2018.

Speaking at an event held by Bruegel Institute in Brussels on Wednesday, Lagarde explained that in order for the IMF board to propose the Fund's participation in the Greek programme, the technical details had to be made specific and there had to be a "sufficient level of commitment" by Greece's creditors for debt relief.

Lagarde noted that the May decision on Greek debt included a series of methods for restructuring Greece's debt but these were presented in a "very general way and without details". This was contrary to the rules for the debt sustainability analysis that must accompany each programme, the IMF chief said. "We cannot leave things at the generality of a list of options; we must enter into the technical details," she added.

In reference to pension reforms, in particular, the IMF chief said it was wrong to accuse the IMF of demanding more "austerity" since it was only asking for the implementation of measures agreed in 2016 without suspending already implemented reforms. She noted that the package would also include income tax reforms that will widen the taxation base.

The next steps, once implementation of these commitments was completed, would be to discuss the sustainability of Greece's debt and the restructuring that will be needed, Lagarde said.

GCT Team

This article was researched and written by a GCT team member.