May 23, 2017 / 8:02 AM / 6 months ago

IMF needs more realism in euro zone assumptions on Greece

BRUSSELS (Reuters) - The International Monetary Fund needs to see more realistic euro zone assumptions about Greece’s economy and more detail on planned debt relief measures to join a bailout, IMF’s European Department head Poul Thomsen said.

An official holds a bag with the euro logo during a eurozone finance ministers meeting in Brussels, Belgium May 22, 2017. REUTERS/Francois Lenoir

Thomsen said the IMF and Greece’s euro zone lenders made progress in talks on Monday, but were not yet quite there.

“We still think there is a need for more realism in assumptions and more specificity,” Thomsen said on Tuesday.

The euro zone and the IMF agreed on Monday that Greece would have to keep a primary surplus -- the budget balance before debt servicing -- at 3.5 percent of GDP for five years after the bailout ends in 2018.

But officials said the size of the surplus afterwards was still under discussion and there were also differences on economic growth assumptions, especially that forecasts used for debt relief plans spanned dozens of years.

A group of euro zone countries led by Germany wants the IMF to join the Greek bailout, now handled by euro zone governments alone, to increase credibility. The IMF says that it will only join if Greece is granted debt relief.

The basis of the discussions is a promise made by euro zone lenders in May 2016 which spells out some assumptions for the possible debt relief. The IMF wants euro zone governments to spell out the various measures in more detail.

“We accept the main assumption of the May 2016 agreement that it does not have to be finally approved, calibrated or delivered before the end of the program (bailout) but we need more specificity on what will come at the end of the program,” Thomsen said.

Reporting By Jan Strupczewski; editing by Philip Blenkinsop

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below