The International Monetary Fund?s executive board will met in the second week of March to decide on the IMF?s contribution to the new Greek bailout, managing director Christine Lagarde said on Tuesday.
?As soon as the prior actions agreed with the Greek authorities are implemented and adequate financial contribution from the private sector is secured, I intend to make a recommendation to our executive board regarding IMF financing to support a program,» said Lagarde, who welcomed Tuesday?s deal but stressed the need for Greece to implement the structural reforms it has agree to.
Jean-Claude Juncker, who chairs the Eurogroup of finance ministers, told journalist that the new loan agreement should guarantee Greece?s future in the eurozone.
“We have reached a far-reaching agreement on Greece’s new programme and private sector involvement that would lead to a significant debt reduction for Greece … to secure Greece’s future in the euro area,» he said following the 13-hour talks in Brussels.
?The debt to GDP ratio is expected to reach 120.5 percent by 2020 and program financing is estimated to amount to 130 billion until 2014.2
Juncker said he expected private Greek bondholders to step forward to take part in the debt restructuring scheme.
“Given the balanced agreement reached with the creditor group led by the IIF and the fact that the package delivers debt sustainability for Greece we expect a high participation rate.”
?I have learnt that marathon is indeed a Greek word,? said European Economic Affairs Commissioner Olli Rehn.
He added that the eurozone would now work on strengthen its financial protection against further impact from the debt crisis.
“It should be possible to combine the firepower of the ESM and the remaining amount of the EFSF in order to have a substantially stronger financial firewall than we have at the moment. If you calculate you can see the ESM is 500 billion euro and the EFSF remainder is 250 billion euro, that is a good starting point to reinforce the IMF resources.
“I expect that we can reach our decision in March so that we can come to a conclusion on the reinforcement of the IMF resources in the course of this spring.”