IMF won't join Greek bailout before reforms, debt relief

AP News
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Posted: Jul 30, 2015 2:52 PM
IMF won't join Greek bailout before reforms, debt relief

WASHINGTON (AP) — The International Monetary Fund official cannot participate in another Greek bailout until Greece and its creditors make difficult decisions on economic reforms and debt relief, a fund official said Thursday.

Briefing reporters on condition of anonymity, the official said Greece needs to commit to reforms and creditors must provide debt relief — extending loan terms or reducing the debt outright — that will allow Greece to pay its bills over time. "It's always been clear the IMF will only come in once these conditions are in place," he said, suggesting that point is months away.

Still, the fund is participating in ongoing debt talks.

In Athens, a government official refused to comment directly on the IMF's participation in the third bailout.

"The IMF's position on debt sustainability is not new. (IMF managing director Christine) Lagarde has referred to this dozens of times," the official said, asking not to be identified because the talks are ongoing.

Bailout negotiations were launched in Greece this week, and have so far largely focused on tax reform, a planned overhaul of labor market regulations, and efforts to simplify bureaucracy for new businesses, as well as attempts to limit an expected recession through 2016.

Lead IMF negotiator Delia Velculescu arrived in Athens late Thursday and was due to meet with Greek Finance Minister Euclid Tsakalotos Friday, the official said.

The IMF has said Greece's debts are likely to rise to 200 percent of its economic output in the next two years, a burden the fund calls unsustainable.