IMF: Greek debt deal is a 'good distance away'

The head of the International Monetary Fund (IMF) Christine Lagarde has issued a written warning to Greek Prime Minister Alexis Tsipras concerning ongoing negotiations for a new debt deal. She said she would only support a "credible" and "realistic" program that delivered sustainable growth in Greece.

"We are still a good distance away from having a coherent program that I can present to our Executive Board," Lagarde wrote in the letter which was also published online as an IMF press release on Sunday.

The reforms, which include tax and pay cuts, are conditions attached to a three-year, 86-billion-euro ($94 billion) bailout signed with the European Union last July. While the IMF was involved in two previous bailouts that Greece has received since 2010, it declined to take part in the third rescue plan without reforms and an EU agreement to ease Greece's debt burden - which currently stands at more than 250 billion euros.

Greece's national debt is set to peak at 185 percent of gross domestic product this year before easing to 181.8 percent in 2017, according to EU predictions. In March, the EU's financial affairs commissioner, Pierre Moscovici, said a debt relief deal could be ready by the summer if the current bailout review was successful.

In her letter, Lagarde added that the IMF would send experts to Athens to continue discussions: "In the interest of the Greek people, we need to bring these negotiations to a speedy conclusion," she wrote.

Tspiras to Lagarde

Tsipras had written to Lagarde, expressing "deep concern" over the Wikileaks report released on Friday which claimed the fund sought a crisis "event" to push Greece into concluding talks over its reforms.

In her response, Lagarde insisted that the IMF "conducts its negotiations in good faith, not by way of threats, and we do not communicate through leaks." She wrote: "Any speculation that IMF staff would consider using a credit event as a negotiating tactic is simply nonsense."

Slow progress

Representatives of Greece's creditors are due in Athens to resume work on the bailout review. Athens faces a series of payments - most pressingly an installment of 2.3 billion euros due on July 20. The government will not receive another payment from the 86 billion euro program until progress in meeting the conditions of the bailout has been endorsed.

Greece has proposed reforms to pensions, tax administration and a required privatization fund.

Eurozone finance ministry deputies were reported to have discussed the current state of the talks on Friday, as the talks between the Athens government and the EU resumed, and the IMF prepared for its spring meetings in Washington. EU finance ministers are set to meet again in Brussels on April 22.

jm/gsw (Reuters, AFP)