‘Urgent’ to reach agreement on loan for Greece: IMF

Athens needs fresh infusion of funds to make its debt payments due in July

Afp April 23, 2017
Athens needs fresh infusion of funds to make its debt payments due in July. PHOTO: Reuters

WASHINGTON: It is “urgent” to reach an agreement on a loan programme for Greece but a commitment is still required from Athens on reforms and from Europe on debt relief, a senior International Monetary Fund (IMF) official said Friday.

“It is urgent that we agree on a programme and that we conclude these discussions because it’s taking a toll on the Greek economy,” Poul Thomsen, head of the IMF’s European department, said.

“There is no doubt about that, it’s serious,” he told reporters.

Talks between Greece, the IMF and the eurozone have dragged on for many months. But Athens needs a fresh infusion of funds soon to make its debt payments due in July.

Despite pressure from European heavyweight Germany, the IMF so far has refused to participate in the 86 billion euro loan programme the eurozone agreed with Greece in mid-2015, the third since 2010, largely over the issue of the nation’s debt sustainability.

Greece needs 'far less' money than agreed in third bailout: ESM head

On the reform side, while some outstanding issues remain, Thomsen said “good progress” has been made with the Greek authorities in recent weeks, including on budget issues. An IMF mission will be back in Athens “next week.”

Greece announced on Friday a budgetary surplus (excluding debt charges) of 3.9% of GDP in 2016, in line with a target set by Europeans.

European Commissioner Pierre Moscovici welcomed the result.“This should contribute to the will for the steps that lie ahead to find a lasting and comprehensive solution,” he said on the sidelines of the IMF Spring meeting.

French Economy Minister Michel Sapin was also optimistic about a deal.

Talks in Brussels: Tsipras warns IMF, Germany to stop ‘playing with fire’

“I am quite confident that we will find, with the IMF and Germany, a solution that will help Greece and thus the EU to stabilise the situation,” he told AFP. Thomsen, however, said disagreements persist over the period of time in which Athens will have to meet the surplus objective, which the IMF considers too ambitious.

The eurozone says Greece can deliver a primary surplus of 3.5% of GDP in 2018 but the IMF has said only 1.5% is feasible. The IMF also needs more clarification from Europe on the how it will implement the promised debt relief for Greece, he said. If these two issues are resolved, the IMF will be able to participate financially in the aid plan, as it did in 2010 and 2012, Thomsen said.

Published in The Express Tribune, April 23rd, 2017.

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