Lagarde: IMF committed to continuing support of Greece after fiscal program ends

The International Monetary Fund (IMF) is committed to continuing its support of Greece after the end of the fiscal program in August, but there is work that the country still needs to do, especially in structural reforms, IMF Managing Director Christine Lagarde said on Thursday.

At a press conference during the fund’s and World Bank’s Spring Meetings in Washington, DC, Lagarde said the fiscal program “is expected to come to an end in August and the IMF is committed to continue to support Greece and to help it get back on this economy sovereignty, and we would do the most we can in accordance to our policy principles.” She added, however, that “structural reforms must actually be implemented, and there is work on the way, and the Greek people are doing through some of it. We know that it is not yet completed.”

The eight years of fiscal policy, although very difficult for the Greek people, “significantly improved the (country’s) economic position,” Lagarde said. The fact that the 10-year Greek bond was below 4% on Wednesday “is clearly an indication that markets eventually will finance Greece because that is the ultimate progress, public financing to be replaced by private financing.” Markets, she said, “are looking at the Greek situation much more favorably than they were before.”

Lagarde also criticised the policy of public spending cuts, which she said the IMF had never advocated. “We know that some of those (economic) successes – and they were good results, often better than expected – are attributable to very drastic measures that were decided by the Greek government, not necessarily on the advice of the IMF, because we have not advocated for additional public spending cuts. So much has been cut,” she noted.