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IMF’s Lagarde has no doubts about European debt relief for Greece

PUBLISHED : Friday, 02 August, 2013, 10:02am
UPDATED : Friday, 02 August, 2013, 10:02am

IMF Managing Director Christine Lagarde said she is confident about Europe’s commitment to provide further debt relief to Greece if the debt-burdened euro zone country abides by the conditions of its bailout.

“I have no reasons to believe the Europeans would not themselves deliver on their undertaking vis-a-vis Greece,” she told reporters. “What form those further measures and assistance will take will certainly be discussed at a later stage.”

The International Monetary Fund is one of a trio of lenders along with the European Commission and the European Central Bank to step in with a 240 billion euro (HK$2.5 trillion) bailout to rescue Greece from a sovereign debt crisis and keep it in the euro zone.

Led by Germany, the euro zone has pledged to consider mild debt relief measures for Greece next year, such as extending maturities on rescue loans, to help the country reduce its mountain of debt and return to capital markets to fund itself.

But German Chancellor Angela Merkel and her government have in recent weeks repeatedly ruled out a further writedown of Greek debt, which has become an issue in the upcoming German elections in September.

Germany’s main opposition leader accused Merkel of covering up the likelihood German taxpayers will have to fund further euro zone bailouts. An open debate about loan losses could damage Merkel in the run-up to the vote.


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