IMF Reiterates Unwillingness to Fund Greece Without Debt Relief

The International Monetary Fund reiterated its unwillingness to provide more financing to Greece without debt relief by euro-member states and further reforms from the Greek government.

The Washington-based lender’s management won’t support a new loan program unless Greece’s debt is sustainable in the medium term and the country’s budget is fully financed for 12 months, an IMF official told reporters Thursday on a conference call. The official spoke on condition of anonymity.

The IMF will require an explicit, concrete commitment of debt relief from euro-member countries before moving forward with a new loan, the official said. European countries haven’t had detailed discussions with the IMF on a debt restructuring, according to the official.

Greek Finance Minister Euclid Tsakalotos asked the IMF for a new loan in a letter dated July 23 addressed to fund Managing Director Christine Lagarde.

Greece has an active loan program with the IMF that expires in March and has about 17 billion euros that could still be disbursed.

In agreeing to a bailout this month that could give Greece as much as 86 billion euros ($94 billion), most of it financed by euro-zone countries, Greece agreed to seek continued IMF financing beyond March.

IMF staff told the fund’s executive board on Wednesday that Greece doesn’t currently qualify for a loan, the Financial Times reported Thursday, citing a confidential summary of the meeting.