IMF's Lagarde sees hope for Greek debt restructure

GMT 21:57 2015 Wednesday ,15 July

Arab Today, arab today IMF's Lagarde sees hope for Greek debt restructure

IMF Managing Director Christine Lagarde
Washington - AFP

International Monetary Fund Managing Director Christine Lagarde said Wednesday that Greece's EU creditors were moving more closely to the idea of restructuring the country's massive debt.

"I have some hope, because as late as a couple of hours ago, I understand that there were some more positive noises towards that principle of debt restructuring," she told CNN International in an interview.

The comments came after the IMF made clear on Tuesday that it could not participate in a third bailout plan for Greece unless its debt is restructured to drastically reduce the medium-term financial burden on the country.

"What we have said to all of them is that no matter what form it takes... one way has to be found in order to release the burden and allow that country to demonstrate that it can be back on a sustainable path," she said.

In a study of Athens's financial situation presented to European Union leaders on the weekend and released publicly on Tuesday, the IMF said the country would never reach a point where its debt was "sustainable" -- that it will over time be able repay its loans -- without a substantial restructuring by official EU creditors.

The Fund suggested three options: Stretching out debt repayments over decades, with a 30-year grace period; sending cash regularly to Athens to repay the debts; or writing down some of the current value of the debt via a "haircut".

Lagarde indicated on CNN that lengthening the payment period was the likely choice, saying she understood direct payments or a haircut are "not on the cards... from the political point of view."


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