Thursday

21st Nov 2019

Lagarde: No IMF in Greek bailout without debt relief

  • 'It will not be a road paved with roses', said Lagarde (Photo: Consillium)

The International Monetary Fund (IMF) will take part in a third Greek bailout only if there is a "complete" programme including a restructuring of Greek debt, the IMF director Christine Lagarde said Friday morning (17 July).

The up-to €86 billion bailout plan "is not viable" without debt relief, Lagarde told France's Europe 1 radio.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 20 year's of archives. 30-day free trial.

... or join as a group

"That is why European countries admitted the principle of debt relief" in the euro summit statement signed Monday (13 July), she added.

While several eurozone countries, including Germany, are opposed to a haircut on the Greek debt, "there are other modalities", Lagarde said.

She did not say how much debt relief is needed, but she said three methods could be used "to make the Greek debt sustainable".

Greece's creditors - the EU, the IMF and the European Central Bank (ECB) "could significantly extend maturities, also extend the grace period when no repayment is done, and compress interest to the maximum," she said.

In any case, the IMF chief said, her institution will take part only if there is "a complete programme".

"A complete programme stands on two legs," she said.

"The first leg is a Greek leg: deeply reform the economy and hold a healthy fiscal line. The second leg is the creditors' leg: provide financing and restructure the debt to lighten the burden."

"This is not a whim," Lagarde said. "There are rules which are applied to all IMF member states."

The Eurogroup gave the green light on Thursday to open bailout negotiations when all eurozone member states have approved the euro summit agreement.

The European Stability Mechanism (ESM), the eurozone emergency fund, said Thursday it would provide €50 billion for the bailout.

ESM chief Klaus Regling said the remaining €32-36 billion needed to complete the bailout programme would be provided by the IMF, as well as privatisations and a possible Greek return on financial markets.

Bailout negotiations "will be laborious," Lagarde warned in her interview.

"We are not at the end of a process yet. A process is opening, with a very tight agenda and a huge challenge," she said.

"It will not be a road paved with roses."

Greek MPs pass bailout austerity laws

Greek MPs adopted laws needed for third bailout, amid bitter debate, and amid fresh German remarks that a Greece euro-exit might be best.

UK to accept Greek short-term loan

The UK will not oppose a €7bn emergency loan for Greece, following an EU commission deal which interweaves Grexit and Brexit.

Germany approves talks on new Greek bailout

The Bundestag Friday voted to open negotiations for a third aid programme for Greece but the number of rebel centre-right MPs voting No grew from 29 in February to 60.

Greece to get €7bn loan on Monday

EU member states agreed on the modalities of a short-term financing which will allow Greece to repays its debt to the IMF and ECB.

Debt relief open to Greece, says Merkel

Greece could receive relief on its debt mountain within months as soon as creditors confirm that it is making good on promised economic reforms, Angela Merkel has said.

Opinion

Why von der Leyen must put rights at core of business

Ursula von der Leyen's in-tray must include those European executives on trial for systematic workplace harassment, the break-up of European slavery rings, and allegations of European companies' abuse in palm oil, including child labour, land grabs, and deforestation.

Stakeholders' Highlights

  1. Nordic Council of MinistersEarmarked paternity leave – an effective way to change norms
  2. Nordic Council of MinistersNordic Climate Action Weeks in December
  3. UNESDAUNESDA welcomes Nicholas Hodac as new Director General
  4. Nordic Council of MinistersBrussels welcomes Nordic culture
  5. UNESDAUNESDA appoints Nicholas Hodac as Director General
  6. UNESDASoft drinks industry co-signs Circular Plastics Alliance Declaration
  7. FEANIEngineers Europe Advisory Group: Building the engineers of the future
  8. Nordic Council of MinistersNew programme studies infectious diseases and antibiotic resistance
  9. UNESDAUNESDA reduces added sugars 11.9% between 2015-2017
  10. International Partnership for Human RightsEU-Uzbekistan Human Rights Dialogue: EU to raise key fundamental rights issues
  11. Nordic Council of MinistersNo evidence that social media are harmful to young people
  12. Nordic Council of MinistersCanada to host the joint Nordic cultural initiative 2021

Latest News

  1. New calls for Muscat to resign over journalist's murder
  2. Tusk pledges 'fight' for EU values as new EPP president
  3. Don't lead Europe by triggering its fears
  4. Finland: EU 'not brain dead' on enlargement
  5. The labour market is not ready for the future
  6. Parliament should have 'initiation' role
  7. AI skewed to young, male, and western EU, report warns
  8. US and EU go separate ways on Israeli settlers

Join EUobserver

Support quality EU news

Join us