IMF Says No Greek Debt Restructure

On the heels of issuing a report praising Greece’s progress in reforms but criticizing its failure to go after tax cheats, the International Monetary Fund (IMF), one of Greece’s international lenders, does not expect a restructuring of the Greek debt any time soon, IMF spokesman Gerry Rice said.
“We do not envision any new (debt) discussions at this juncture,” Rice told reporters at a regular briefing, adding that the IMF board will convene to discuss the disbursement of the next loan tranche to Greece on May 31. The target is to bring Greece’s debt below 124% of GDP by 2020 and below 110% by 2022, he said.
A previous government last year, when current PASOK Socialist leader Evangelos Venizelos was finance minister, imposed 74 percent losses on bondholders and investors, including those in the Diaspora who put their savings into helping their homeland, so Greece could reduce its staggering debt by $134 billion.
Last week the IMF had said that the country’s public debt remained “much too high,” adding that “it is, therefore, very welcome that Greece’s European partners have now accepted that Greece could need significant exceptional support on below-market terms in order to restore debt sustainability and that they have committed to provide additional relief, if needed.”
The IMF board will also convene on May 15 to discuss Cyprus’ 10 billion euros ($13 billion) bailout. Responding to a question on whether the Cypriot people should have to pay for bankers and politicians’ mistakes, Rice said that the IMF and EU’s mission is to help the country return to sustainable growth.
That came as Finance Minister Yiannis Stournaras said that Greece has hopes of returning to bond markets around the end of 2014, delighted that interest rates on its bonds had fallen to their lowest levels since last year’s debt restructuring. Greek 10-year bond yields dropped below 10 percent on May 8.
The country, which has been bailed out with some 200 billion euros ($260 billion) in rescue loans from the EU and IMF since May 2010 – with another 40 billion euros ($52 billion) due  – won praise from the lenders last month for complying with the terms of the rescue package.
Sovereign yields across the euro zone periphery have fallen steadily since the European Central Bank announced a bond buying program to provide a debt backstop for struggling states.
“I hope that we can have the same luck as Ireland and Portugal, which already start accessing markets with yields below 6 percent,” Yannis Stournaras told Greek state television in an interview. “I see that happening towards the end of 2014.”
Greece has been shut out of bond markets since early 2010, when it plunged into a debt crisis that forced it into becoming the first Eurozone country to seek an international bailout.