A form of debt restructuring rather than outright forgiveness should enable Greece to handle its “unviable” debt burden, the head of the International Monetary Fund was quoted as telling a Swiss newspaper. The IMF has yet to make clear whether it will participate in the third 86 billion euro ($96 billion) international bailout that Greece agreed to in early August, having argued in favor of a partial writedown of a debt burden it considers unsustainable in its current form.
Greece’s eurozone creditors, notably Germany, have ruled out a writedown, but are willing to consider other forms of restructuring, such as a lengthening maturities.
Concerning those differences, IMF Managing Director Christine Lagarde told Le Temps Saturday: “The debate on canceling the debt has never been open. I don’t think it is necessary to open it if things go well. … We are talking about extending maturities, reducing rates, [making] exemptions for a certain period of time. We are not speaking about canceling debt.”
The interview made no mention of whether the IMF will take part in the new bailout: Lagarde has previously said the fund will make a decision about it by October.