IMF chief denies threat to pull out of Greek bailout

Sun Apr 3, 2016 6:50pm EDT
 
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By Lefteris Papadimas and David Lawder

ATHENS/WASHINGTON (Reuters) - International Monetary Fund Managing Director Christine Lagarde denied on Sunday that IMF staff would push Greece closer to default as a negotiating tactic on a new Greek bailout deal, which she said was "still a good distance away."

Lagarde said in a letter to Greece's prime minister that the debt talks should continue despite damage from reports of a leaked transcript suggesting that IMF staff may threaten to leave the bailout to force European lenders to offer more debt relief.

"Any speculation that IMF staff would consider using a credit event as a negotiating tactic is simply nonsense," Lagarde wrote to Greek Prime Minister Alexis Tsipras.

"My view of the ongoing negotiations is that we are still a good distance away from having a coherent program that I can present to our Executive Board," Lagarde wrote, adding that such a deal must put Greece on a path of robust growth and gradually restore debt sustainability.

Tsipras' office said on Sunday that he had demanded that Lagarde clarify the IMF's stance after Internet whistleblowing site WikiLeaks published what it said was the transcript of a March 19 conference call of three senior IMF officials.

The officials were discussing tactics to apply pressure on Greece, Germany and the EU to reach a deal in April. They were quoted as discussing a threat that the fund might not participate in Greece's third bailout program as a way to force EU creditors, especially Germany, to reach a deal on debt relief before Britain's June referendum on whether to stay in the European Union.

EU/IMF lenders are due to resume talks on Greece's fiscal and reform progress in Athens on Monday, aiming to conclude a bailout review that will unlock further loans and pave the way for negotiations on long-desired debt restructuring.

The review has been adjourned twice since January due to a rift among the lenders over the estimated size of Greece's fiscal gap by 2018, as well as disagreements with Athens on pension reforms and the management of bad loans.   Continued...

 
The International Monetary Fund (IMF) logo is seen at the IMF headquarters building during the 2013 Spring Meeting of the International Monetary Fund and World Bank in Washington, April 18, 2013. REUTERS/Yuri Gripas