IMF: No haircut for Greek debt but more reforms are needed

AP News
Posted: Feb 22, 2017 1:49 PM
IMF: No haircut for Greek debt but more reforms are needed

BERLIN (AP) — International Monetary Fund head Christine Lagarde said after talks with Chancellor Angela Merkel in Berlin that she sees no need for a "haircut" of Greek debt but that Athens needs to make "significant progress" on reforms.

Lagarde told Germany's ARD television on Wednesday the IMF was "much more confident after the progress made by the Greek authorities" but that reforms were urgently needed in the country's pension and income tax systems, as well as in other areas.

"At the present time, no haircut is needed," she said, adding that she did see the need for debt restructuring to be implemented at the end of the current bailout program as well as possible interest rate cuts.

"What will be needed is not a haircut if the reforms are done, but a significant extension of maturity, a significant interest rate capping, and that will have to be discussed in greater detail later on as progress is made on the reform front," she said.

Athens agreed Monday to implement further reforms beginning in 2019, after the country's current third bailout has ended.

Greece and its European creditors are in talks over what reforms Greece must make to keep tapping bailout loans.