IMF Managing Director Christine Lagarde gave an interview on April 12, 2017 in Brussels to Jean-Jacques Mével (Le Figaro), Claudi Pérez (El País) and Dominique Berns (Le Soir), representing the Leading European Newspapers Association (LENA), which also includes La Repubblica (Italy); Tribune de Genève and Tages-Anzeiger (Switzerland); and Die Welt (Germany).
On the issue of the fund’s participation to the Greek programme Mrs Lagarde said:
“There are two aspects to it. One is short term, which is part of the ESM program and would be part of our own program– if we were to have one. And second, there is the longer-term fiscal path going forward, which will determine the debt sustainability analysis. In both areas, we need to converge as much as possible. But clearly, whatever the IMF would finance–if we were to join–would be on the basis of both the fiscal path and our debt sustainability analysis.
In the long term, we believe that a 1.5% primary surplus is sensible given all that the economy has gone through, and given the Greeks’ capacity to reform. If the Europeans determine differently, then we need to take that into account. But we cannot adopt unreasonable forecasts or build unjustifiable macroeconomic frameworks”.
Responding to another question Mrs Lagarde said that “it is plausible that the IMF would participate in a Greek program, as the Greek government has requested, if significant reforms are legislated to be implemented, and if debt is restructured to accommodate our debt sustainability analysis–conducted in accordance with the IMF’s rules. So, it is plausible. And we have seen progress on the first part”, adding that if the Greek debt is not sustainable in accordance with the IMF’s rules and on the basis of reasonable parameters, the IMF will not participate in the program.
The decision on the Greek debt sustainability has not yet been made because of the need to to have “solid reforms” and “debt that is sustainable” Mrs Lagarde said diplomatically avoiding to commit the decision to a specific timeframe.
