Lagarde says restructuring should suffice for Greek debt

Zurich, August 29

A form of debt restructuring rather than outright forgiveness should enable Greece to handle its ‘unviable’ debt burden, the head of the International Monetary Fund (IMF) was quoted as telling a Swiss newspaper.

The IMF has yet to make clear if it will participate in the third 86-billion-euro ($96 billion) international bailout that Greece signed up to in early August, having argued in favour of a partial writedown of a debt burden it considers unsustainable in its current form.

Greece’s eurozone creditors, notably Germany, have ruled out a writedown but are willing to consider other forms of restructuring such as a lengthening maturities.

Asked about those differences, IMF Managing Director Christine Lagarde told today’s edition of Le Temps: “The debate on cancelling the debt has never been open I don’t think it is necessary to open it if things go well ...”

“We are talking about extending maturities, reducing rates, (making) exemptions for a certain period of time. We are not speaking about cancelling debt.”

The interview made no mention of whether IMF will take part in the new bailout.