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IMF's Christine Lagarde: 'Greek Plan Not Viable Without Debt Haircut'

Christine LagardeThe IMF is willing to participate in the next Greek bailout program, provided that the Eurozone allows a debt haircut or restructuring, so that the debt becomes sustainable and the country can receive market financing, said the fund’s Managing Director Christine Lagarde.
In an interview on Europe 1 radio, Lagarde said the solution recommended by the IMF was “to significantly extend maturities, also lengthen the grace period during which no refund is made, and reduce the interest up.” The IMF chief also stressed that it is “likely” the Greek banks will open Monday as planned.
“We believe that by using these three methods of really significant ways may be enough to make the debt bearable” said Christine Lagarde. In other words, “a debt sustainability, one can quite achieve it by other methods than a straight cut on the amount of debt.”
The rules of the Fund largely do not allow countries to co-finance a rescue where the debt is considered unsustainable, raising concerns among European partners, who want IMF’s experts to participate in the country’s evaluation.
Meanwhile, Ewald Nowotny, an Austrian economist and president of the National Bank of Austria said that it may take up to six or eight weeks to form a complete bailout program for Greece.

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