WASHINGTON: Debt relief negotiations for Greece should focus on extended grace and maturity periods and "very low interest rates," the International Monetary Fund said on Thursday.
At a regular news briefing in Washington, IMF spokesman Gerry Rice declined to confirm reports that the IMF is pushing for a halt in Greek debt repayments until 2040 as part of the negotiations. He said the debt talks with Athens and European lenders were an essential component of the restructuring of Greece's bailout, along with Greek fiscal reforms.
"We have exchanged preliminary views with our partners on general principles regarding debt relief," Rice said. "We believe that it is possible to restore debt sustainability without upfront haircuts, although this would involve providing very concessional loan terms, including long grace and maturity periods and very low interest rates".
Euro zone finance ministers are expected to meet on May 24 to try to finalize a restructuring plan for Greece's bailout that can secure the IMF's participation. The Fund has been pressing Europe for more debt relief and Greece to reduce "generous" pension benefits and tax exemptions.
If a deal is reached next week, Rice said that he could not say when the IMF's board would be in a position to consider it.
"We stand ready to take a program to the board, but ti would need to meet those objectives and principles," he said, adding that it needed to be in line with the way the Fund treats other countries with IMF bailout programs.
"The IMF is flexible, but we have a job to do and the membership looks to us to do that job," Rice added.
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