IMF says Greek financing gap, debt sustainability must be addressed before next tranche
The International Monetary Fund needs assurances that any financing gap in the Greek loan will be filled and that the country’s debt is on a sustainable path before the IMF can disburse its share of the bailout, a fund spokesman said.
IMF Managing Director Christine Lagarde said last week Greece’s financing shortfall won’t be solved with just the budget measures currently being discussed, because its growth prospects are too weak. She also said the Greek debt would have “to be addressed,” pushing European policy makers to consider writing off some of the aid to the country.
For the loan “to move forward, we need two key elements -- we need the debt sustainability and the financing assurances and both of those things need to be in place,” IMF spokesman Gerry Rice told reporters in Washington today. “As to how these requirements will be fulfilled in the context of the current review, we still have to discuss this with the Greek authorities and the European partners.”
The objective of bringing down Greece’s debt to 120 percent of its gross domestic product by 2020 “remains the target for the time being,” Rice said.