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IMF Links Required Reforms to Greek Debt Easing, New Bailout Program Might be Needed

imfInternational Monetary Fund Spokesman Gerry Rice said on Thursday that the issue of Greek debt relief is linked to the implementation of required reforms in Greece.
Rice spoke in a press conference saying that the IMF welcomes the euro zone’s intention to discuss the measures at the next Eurogroup meeting on December 5. He said that the IMF will assess those measures and their impact on the Greek debt. The measures, however, do not have to be implemented in advance.
Instead, the debt relief measures can be applied depending on the progress Greece makes in its reforms program. That was an implication that Greece may need another bailout program. He underlined, though,  that for the IMF to reach a decision on its participation in the Greek program, it will need to know the breadth and form of those measures.
Rice said the Fund agrees with the existing program that requires a primary surplus target of 1.5 percent of Greek gross domestic product, so additional measures should not be required.
“We think the current policy package is broadly consistent with a primary surplus target of around 1.5% of GDP, and that no more measures are needed if debt relief is calibrated on the basis of that target, on the basis of the 1.5% of GDP,” he said.
Commenting on the issue of debt relief and the discussion on the December 5 Eurogroup, Rice said that, “We would welcome that discussion. What we have said many times is that the debt relief does not need to be implemented up front and can be conditional to Greece delivering on an agreed reform program, but, you know, again, we need to be able to explain to our Board that there is broad agreement on the type and the scope of debt relief that would be provided.”
The IMF spokesperson reiterated that the debt relief issue will depend on the debt sustainability analysis that will be released in December. “We will have the publication of the Greek Article IV, we expect in December, and there will be the DSA, the debt sustainability analysis, provided at that time.”

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