IMF sees no immediate need for Greek debt haircut

May 10, 2013 | 14:32

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The International Monetary Fund on Thursday dismissed the idea of a fresh debt write-down for Greece and said the country could receive its next bailout instalment in early June.

(AFP/File/Louisa Gouliamaki)

WASHINGTON: The International Monetary Fund on Thursday dismissed the idea of a fresh debt write-down for Greece and said the country could receive its next bailout instalment in early June.

"We do not envision any new OSI discussion at this juncture," IMF spokesman Gerry Rice said, referring to official-sector involvement in debt forgiveness for Greece.

Rice recalled that Greece's European partners had said they would provide Greece additional debt relief and review the situation by year-end, but they had not specified the details of the so-called "haircut," or debt write-down.

Under the international bailout program from the IMF, the European Union and the European Central Bank, Greece must reduce its public debt to 124 per cent of gross domestic product (GDP) by 2020, and to below 110 per cent in 2022.

After private creditors forgave more than 100 billion euros of Greece's debt in 2012, most Greek debt is held by the three international lenders.

In late November, Greece's European partners agreed to lower interest rates so the crisis-wracked eurozone country could speed up progress on reducing debt, which this year is expected to hit 180 per cent of GDP.

The IMF spokesman said that the Fund's executive board, which represents the 188 member nations, is expected to meet May 31 to discuss whether to release a 1.7 billion euro loan instalment to Greece under the bailout agreed in March 2012.

"We would expect the distribution to take place shortly after that," Rice said.

"There has been progress in resolving the few remaining technical issues" that are holding up conclusion of a review of Greece's recovery efforts, he said.

AFP

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