IMF's Lagarde says Greece must reform before debt relief
By Anna Yukhananov
WASHINGTON (Reuters) - One day after Greece became the first developed economy to default on a loan with the International Monetary Fund, the head of the international lender on Wednesday suggested Greece should move to reform its economy before its European creditors give it a break on its debt.
In an interview with Reuters, IMF Managing Director Christine Lagarde avoided any pointed criticism of Greek Prime Minister Alexis Tsipras but still hinted at frustrations as she noted that Greece's economy had been on the road to recovery before the current left-wing Syriza party came to power.
Lagarde was asked which should come first, commitments to reform by Athens or relief on its debts from euro zone governments.
"Given where we are, my suspicion is it would be much preferable to see a deliberate move towards reforms (and) for that to be followed through by the other side of the balance," Lagarde said.
Greece's government had pushed for debt relief in months of negotiations with its European and IMF lenders on a cash-for-reform deal before Athens abruptly called a referendum.
A defiant Tsipras urged Greeks on Wednesday to reject an international bailout deal - which calls for even greater austerity measures - wrecking any prospect of repairing broken relations with EU partners before the referendum on Sunday that may decide Greece's future in Europe.
"We do not have a choice as to who represents a country," Lagarde said when asked about the trustworthiness of the Greeks. "And we take all governments, duly elected ... as the legitimate partner in the negotiations."