IMF: Greek primary surplus target requires heroic effort

IMF: Greek primary surplus target requires heroic effort

The International Monetary Fund retains reservations about Greece achieving the fiscal targets included in the country’s bailout program, which is why it is putting pressure on Greece’s European creditors to ease the country’s debt.

In a press conference in Washington on Thursday, IMF Managing Director Christine Lagarde expressed “skepticism” over whether the target for a primary surplus amounting to 3.5 percent of gross domestic product by 2018 is feasible. It will take a “heroic effort for the 3.5 percent primary surplus to be attained,” she stated. The Fund chief also said that the primary surplus target is not sustainable, even if it is met once.

In response to a question on the ongoing bailout review, Lagarde underscored the need for it to be concluded as quickly as possible, saying that “the last thing Greece needs at this moment is another delay.” She added that on this issue she is in agreement with the Greek government.

Lagarde also highlighted that it was she herself who had said that Greece requires “stability, sustainability and national sovereignty,” and that it is for that reason that realistic assumptions ought to be made on the macroeconomics of the country and the type of measures to be taken.

“We will see what measures are being proposed,” said Lagarde.

At the same time, the IMF head stated, a solution is required for the national debt, which will concern not only the maturity dates of bonds but also the level of interest rates. She went on to reiterate the Fund’s known position regarding the need for two pillars on which the Greek bailout program will have to rely, meaning the reforms and a lightening of the national debt that does not entail a haircut. She did add, however, that “realistic approaches” are required, underscoring that the IMF is doing everything possible in that direction – making an arduous effort, as Lagarde said.

The IMF is not leaving the program, she promised, but it could take a different role: “The way we will participate may be different, depending on the commitments of Greece and the participation of the Europeans, but we will not leave.”

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