IMF insists on eurozone lightening Greece’s debt

Fund remains against horizontal cuts to salaries and pensions By Katerina Sokou

The International Monetary Fund insists that Greece’s debt needs to be restructured and is waiting for the issue to be discussed this fall in the context of the Greek economy’s next assessment, a spokesman for the Washington-based Fund confirmed on Thursday.

In response to a question by Kathimerini, IMF deputy spokesman William Murray stressed that “there is an agreed framework in place which secures the sustainability of the debt.”

He stressed that if Greece fulfills its program commitments, its eurozone peers have agreed “to as much additional lightening of the debt as is necessary, so that they contribute to the reduction of the Greek debt to 124 percent of the gross domestic product by 2020, and considerably below 110 percent of GDP by 2022.” As Greece has achieved a primary fiscal surplus, the IMF expects that “these issues will be discussed with the Europeans in the context of the sixth assessment in mid-September,” and “with an intention as always to have an agreement as soon as possible.”

Asked whether the IMF will demand public sector layoffs or new salary reductions, Murray stressed that the Fund “supports the objective of the Greek authorities to avoid horizontal cuts to salaries and pensions… It is therefore important that structural reforms on the fiscal front are implemented, with the modernization of the fiscal institutions.” As an example he cited the improvement of the tax administration – “where progress continues to lag” – so that “everyone pays his share in taxes.”

Murray reiterated that Greece “has made huge progress in restoring its fiscal sustainability. We expect its fiscal target for this year to be met and we see no need for additional measures for 2014.” Regarding the rise in poverty in Greece as a result of the adjustment program, Murray admitted that “we understand the need to address poverty in Greece and everywhere, it is already being examined and I am sure this will form part of discussions in the future.”