BERLIN (Reuters) - International Monetary Fund Managing Director Christine Lagarde has offered Greece’s European creditors a way out of their impasse over Athens’ debts that would allow the euro zone to release a tranche of aid later this month.
The IMF believes Greece needs a debt haircut, which Germany rejects. Lagarde suggested agreeing a deal whereby the IMF would stay on board in the bailout, as Berlin wants, but not pay out further aid until debt relief measures are clarified.
“There can therefore be a program in which the disbursement only takes place when the debt measures have been clearly outlined by the creditors,” she told Handelsblatt in pre-released comments to run in its Tuesday edition.
The compromise could allow euro zone finance ministers to give the go-ahead for their next payment of their tranche of aid at their meeting on June 15, Handelsblatt said.
“It is a possibility for an agreement,” Lagarde said.
Greece has about 7 billion euros ($7.9 billion) of debt maturing in July, a sum it will not be able to repay unless it gets new loans out of its current bailout worth up to 86 billion euros, the third aid program since its debt crisis began.
Euro zone finance ministers failed to agree with the IMF last month on debt relief terms for Greece. They did not release new loans to Athens but recognized it had made significant progress with reforms.
Greece hopes that euro zone finance ministers will offer enough clarity in June on debt relief measures that could be carried out after its bailout ends in 2018, to show investors that its debt - now at 197 percent of GDP - will be sustainable and help it return to bond markets as early as this summer.
Writing by Paul Carrel, editing by Larry King and Susan Fenton