IMF to Participate in Greece Bailout if It Includes Debt Restructuring

 
   By Inti Landauro 
 

        PARIS--The International Monetary Fund will participate in the Greek bailout plan if it includes debt restructuring and bold government reforms, its chief Christine Lagarde said Friday.
        The Washington-based fund would step in only if the Greek government commits to deep economic reforms and "a healthy budget policy," Ms. Lagarde said in an interview with French radio station Europe1.
        She added that no solution for Greece is possible without debt restructuring, though a straight "haircut" isn't on the table.
        The debt reduction can be achieved through an extension of debt maturities, an extension of grace periods and a maxiumum reduction of interest rates, she said.
        "This is not a whim," said Ms Lagarde. "This is not the IMF meddling with Greek affairs, these are the rules set up for all IMF member countries."
        The IMF, and its largest shareholder, the U.S., have repeatedly warned eurozone officials in recent days that Greece will need a far larger debt restructuring than has been considered so far as capital controls asphyxiate the country's already weakened economy.
        Ms. Lagarde said any talks with Athens will take at least four weeks as the situation has become more complex. "We haven't been working with Greek teams for six months, we don't have information on the financial system, for instance," she said.
        She added that the reopening of Greek banks on Monday is likely after the European Central Bank raised its emergency-lending ceiling to Greek banks by EUR900 million on Thursday.
        On the same radio station, French Finance Minister Michel Sapin said he is in favor of a Greek debt restructuring but opposed to any direct haircut, which would be against French tax payers' interest.
        "We must get our money back," Mr. Sapin said.
        Write to Inti Landauro at inti.landauro@wsj.com
        (END) Dow Jones Newswires

        July 17, 2015 02:54 ET (06:54 GMT)

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