IMF: We need strong policies and the debt relief to ensure the Greek program adds up

The sooner there is agreement on both, the sooner we can bring a program to our Board, spokesperson Gerry Rice said on Thursday’s press conference.

“We are working with the Greek authorities and the European partners on a program that adds up and that the IMF can support. We have talked about that before here many times, the need for strong policies, the need for debt relief to ensure debt sustainability.

The sooner there is agreement on both, the sooner we can bring a program to our Board. We do not have a hard deadline for this, but we hope the agreement can be reached very quickly.

I think, as I said the last time here regarding policies, we think the current policy package is broadly consistent with a primary surplus target of around 1.5 percent of GDP, and that no more measures are needed if debt relief is calibrated on the basis of that target, on the basis of the 1.5 percent of GDP.

So, we can support a program based on a long-term primary surplus target of 1.5 percent, and thus, we’re not asking for more austerity, more measures, you know, provided the program is based on that target of 1.5 percent.

On the Eurogroup and the debt, the Eurogroup chairman had mentioned there would be some new ideas presented at the next Eurogroup meeting on December 5. We would, of course, welcome new ideas for debt relief measures and are open to discuss them at any time. As I said here many times before, for us to go to the Board, we need that complete package. We need the policies and the debt relief to ensure the program adds up.”

The IMF spokesperson further noted that “we are running as fast as we can. We would like this to be done as quickly as possible. We’re moving urgently and rapidly. I don’t have, as I said, a hard deadline on it, but we want to move as quickly as we can. On the debt relief, again, the measures and the discussion that may take place on December 5 at the Eurogroup, according to the chair, again, we would welcome that discussion.

What we have said many times is that the debt relief does not need to be implemented up front and can be conditional to Greece delivering on an agreed reform program, but, you know, again, we need to be able to explain to our Board that there is broad agreement on the type and the scope of debt relief that would be provided.

So, we need that to go forward. Again, I think I mentioned last time around, we will have the publication of the Greek Article IV, we expect in December, and there will be the DSA, the debt sustainability analysis, provided at that time.”