W. Murray: IMF needs to see that Greek programme ‘adds up’

“The requirements for the conclusion of the second review of the ESM programme are for the European partners to decide,” International Monetary Fund spokesman William Murray said on Thursday, during a regular press briefing.

While stating that the IMF remains “fully engaged” in the Greek programme, he also noted that the Fund needs “to see that the programme adds up” before it can recommend a potential Fund financing programme to its executive board for consideration.

He confirmed that the IMF executive board will meet to discuss the Greek programme, including its debt sustainability analysis (DSA), on February 6 and repeated that there was no change in the IMF’s views in terms of the sustainability of a Fund programme for Greece’s debt.”We’ve been pretty clear all along, my message to you on Greece in that regard is not going to change today,” he said.

Pressed further, he repeated that the IMF is “fully engaged with the Greeks and with the Commission in terms of the ESM programme and review,” as announced after the meeting between IMF Managing Director Christine Lagarde and German Finance Minister Wolfgang Schaeuble in Davos.

Murray declined to give any deadline for when an IMF decision on whether to finance the Greek programme could be expected, while refusing to speculate on the “implication of elections” in a number of European countries for the Greek programme. He said only that a decision remained a possibility, since the IMF was working in concert with Greeks and the Europeans partners to come to an agreement as soon as possible.

He also repeated the IMF’s position that Greece does “not need more austerity now and that the Fund can go along with the programme with a primary surplus target of 1.5 pct of GDP, consistent with the policies now underway and a commensurate debt relief.”

“But if Greece and its European partners decide on a higher primary surplus for a temporary period we would need to evaluate the policies that could credibly support that target,” Murray added. He noted that there were a number of reforms that the IMF has articulated in the past, saying they were “long overdue and we think they would be necessary to support a higher target and to allow for a more equitable distribution of the burden of economic adjustment in Greece.”

“But any reforms in support of an ambitious medium-term fiscal target should be implemented only once the output gap closes to minimise the negative impact and get some early recovery in Greece,” he said.