IMF’s Lagarde Says Greece Needs More Time to Meet Targets

IMF Managing Director Christine Lagarde
Christine Lagarde, managing director of the International Monetary Fund (IMF), speaks during a news conference at the Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group in Tokyo, Japan, on Thursday, Oct. 11, 2012. Photographer: Kiyoshi Ota/Bloomberg

International Monetary Fund Managing Director Christine Lagarde said Greece should get two years to meet fiscal targets and suggested debt reductions are needed before a 130 billion-euro ($167 billion) bailout can proceed.

“It’s sometimes better to have a bit more time,” Lagarde said today at a press conference in Tokyo marking the start of the fund’s annual meeting. “This is what we advocated for Portugal, this is what we advocated for Spain and this is what we are advocating for Greece.’

Comments by IMF officials over the past weeks suggest that the fund will seek commitments from European policy makers to help Greece in ways ranging from writing off debt to providing additional loans before agreeing to disburse its share of the bailout agreed in March. The IMF has indicated that it won’t lend more money to Greece.

As lenders negotiate with the Greek government over new budget cuts, Lagarde said today that fiscal and structural measures are only part of what has to be discussed:

‘‘We also have to look at the financing and the debt situation of the country. All four chapters have to be looked at,” she said.

The Greek government forecasts that general government debt will climb to 179.3 percent of gross domestic product in 2013, pushing it further from the IMF’s target of 120 percent of GDP by 2020.

“We will spare no time, no effort to actually do as much as we can in order to help Greece,” Lagarde said. The fund’s purpose is “to make sure that Greece is back on its feet, that it can one day return to markets, that it doesn’t have the need for constant support.”

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