BUSINESS

Athens's early market return not productive, says IMF

KATERINA SOKOU

TAGS: Economy

The International Monetary Fund (IMF) considers an early return by Greece to capital markets as counterproductive, according to reports from Washington.

Even though it shares the same goal as the government for Greece to tap international markets, the IMF is reportedly being cautious, at least for the time being, over the outcome, as it could prove costly and may adversely impact the country’s debt sustainability.

IMF officials in Washington reiterated that Athens still has a packed agenda ahead in order to ensure the return of trust, growth and market funding. This follows last week’s remarks by Delia Velculescu, the IMF’s mission chief for Greece, who said that the testing of debt markets must not increase the debt but, instead, should facilitate debt repayments in the medium and long term, in line with the country’s bailout targets.

The Washington-based organization believes that a far more effective course of action would be a reduction of primary surplus targets to 1.5 percent of GDP after 2022.

A further concern expressed by the IMF is that the capital from international markets could be used by the government to fund social benefit programs, in violation of the parameters of the country’s third bailout.

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