IMF: “No need for a priori debt relief to participate in Greek program”

11 November 2016
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The International Monetery Fund does not require debt relief measures to be applied in advance, in order to participate in the Greek program, argued the spokesperson Gerry Rice on Thursday’s press conference. Asked on the medium-term measure for the Greek debt relief agreement, the spokesperson for the IMF commented that the Fund is working with the Greek and European authorities on a program “that adds up”.

“We have talked about that before here many times, the need for strong policies, the need for debt relief to ensure debt sustainability. The sooner there is agreement on both, the sooner we can bring a program to our Board. We do not have a hard deadline for this, but we hope the agreement can be reached very quickly. I think, as I said the last time here regarding policies, we think the current policy package is broadly consistent with a primary surplus target of around 1.5% of GDP, and that no more measures are needed if debt relief is calibrated on the basis of that target, on the basis of the 1.5% of GDP” he noted.

The IMF spokesperson further noted that the Fund “can support a program based on a long-term primary surplus target of 1.5 percent, and thus, we’re not asking for more austerity, more measures, you know, provided the program is based on that target of 1.5 percent. On the Eurogroup and the debt, the Eurogroup chairman had mentioned there would be some new ideas presented at the next Eurogroup meeting on December 5. We would, of course, welcome new ideas for debt relief measures and are open to discuss them at any time”.

Later on the IMF official was asked whether these new measures are enough for the Fund to participate in the problem, given that they are medium-term. Mr. Rice responded that “we are running as fast as we can. We would like this to be done as quickly as possible. We’re moving urgently and rapidly. I don’t have, as I said, a hard deadline on it, but we want to move as quickly as we can”.

Commenting on the issue of debt relief, Mr. Rice explained that “the measures and the discussion that may take place on December 5 at the Eurogroup, according to the chair, again, we would welcome that discussion. What we have said many times is that the debt relief does not need to be implemented up front and can be conditional to Greece delivering on an agreed reform program, but, you know, again, we need to be able to explain to our Board that there is broad agreement on the type and the scope of debt relief that would be provided”.

The IMF spokesperson concluded that “we need that to go forward. Again, I think I mentioned last time around, we will have the publication of the Greek Article IV, we expect in December, and there will be the DSA, the debt sustainability analysis, provided at that time”.

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