IMF: Greek debt sustainability a major issue in activating SBA funding

The International Monetary Fund (IMF) expressed its willingness, through IMF spokesman Gerry Rice, to collaborate with Greece’s European partners for a solution that will credibly reduce Greece’s debt and lead the country to a viable recovery.

During a regular briefing in Washington, DC, Rice was reported as saying that the outstanding differences IMF has with the European Commission and the European Central Bank, Greece’s other creditors, have not been overcome for the Fund to activate additional funding.

Rice reiterated that the IMF has a stand-by-arrangement (SBA) with Greece, approved in principle, that is conditional on two factors: the continuing implementation of reforms – on which he said progress had been made – and debt relief from Greece’s European partners. Once those two conditions are met, Rice said, the IMF Executive Board will be able to activate the SBA funding program, which expires on August 31. Although he said he remained optimistic about resolving the issue, he expressed the IMF’s continuing reservations on the viability of the Greek debt.