BUSINESS

IMF needs more realism in eurozone assumptions on Greece

TAGS: Economy, Diplomacy

The International Monetary Fund needs to see more realistic eurozone assumptions about Greece's economy and more detail on planned debt relief measures to join a bailout, IMF's European Department head Poul Thomsen said.

Thomsen said the IMF and Greece's eurozone lenders made progress in talks on Monday, but were not yet quite there.

"We still think there is a need for more realism in assumptions and more specificity," Thomsen said on Tuesday.

The eurozone and the IMF agreed on Monday that Greece would have to keep a primary surplus – the budget balance before debt servicing – at 3.5 percent of GDP for five years after the bailout ends in 2018.

But officials said the size of the surplus afterwards was still under discussion and there were also differences on economic growth assumptions, especially that forecasts used for debt relief plans spanned dozens of years.

A group of eurozone countries led by Germany wants the IMF to join the Greek bailout, now handled by eurozone governments alone, to increase credibility. The IMF says that it will only join if Greece is granted debt relief. 

[Reuters]

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