news

12.09.2016

EU/IMF rift on Greek debt is hurting country, Tsipras says

A rift between the International Monetary Fund and the European Union over how to make Greece's debt sustainable is damaging the country's attempts at economic recovery, Prime Minister Alexis Tsipras said on Sunday.

Describing the debt pile, equivalent to more than 170 percent of economic output, as not just a Greek but a "European problem", he said investors would remain wary of the country for as long as the two sides were at odds on how to restructure it.

"I would say that what is creating conditions of delay in regaining trust of markets and investors ... is the constant clash and disagreement between the IMF and European institutions," Tsipras told a news conference in the northern city of Thessaloniki.

Greece almost tumbled out of the euro zone last year, with investors fleeing its assets as talks dragged on between Athens and international lenders over terms of a financial bailout, the country's third since 2010.

The IMF has yet to decide whether to participate in Greece's newest international bailout, saying it is not yet convinced the country's debt is sustainable or its fiscal targets feasible.

Greece's debt to GDP ratio is the highest in the euro zone.

Tsipras said differing views among lenders was preventing the inclusion of Greek debt in the European Central Bank's quantitative easing (QE) asset purchase program. The ECB has said it cannot specify when it could start buying Greek bonds, but that Greece needs to pass a debt sustainability analysis before it happens. 

Lenders have promised to look at how Greece's debt mountain can be made sustainable, and whatever they decide will swing whether the IMF decides to sign up for the latest bailout deal.


Source: Reuters

return