World Economy

No Grace for Greece

No Grace for GreeceNo Grace for Greece

International Monetary Fund chief Christine Lagarde has rebuffed talk of Greece obtaining a delay on its debt payments to the Fund. Her remarks came at a meeting with the World Bank in Washington.

The IMF chief did her best to puncture Greece's hope's at the meeting in Washington, DW reported. "It's clearly not a course of action that would actually fit," she said to reporters' questions on Greece, adding: "We have never had an advanced economy ask for payment delays." Lagarde said a Greek delay on its repayments to the Fund would not be recommended in the current situation. Greece is struggling with a tight liquidity situation while it negotiates with its foreign creditors.

In its update of global prospects this week, the IMF stuck to its forecast of "subdued" growth of 3.5 percent this year, picking up to 3.8 percent in 2016. But IMF chief economist Olivier Blanchard warned that countries need to commit more effort to investments, especially in infrastructure, and implement market-opening reforms to increase output faster. "It would be wrong to speak, as some have done, of stagnation, but prospects are more subdued," he said. "And more subdued prospects lead, in turn, to lower spending and lower growth."

Progress on finding a solution to Greece's financial woes has not been satisfactory, the European Commission warned Thursday, a week before eurozone finance ministers are due to tackle the issue.

  Praise for UK Economy

Lagarde has endorsed the UK government's economic strategy. She said: "It's obvious what's happening in the UK has worked."

Lagarde played down differences between the IMF calculation of the future deficit and the more optimistic one provided by the Office for Budget Responsibility. She said the figures were virtually the same, but just calculated differently. George Osborne was sharing a panel with Lagarde and German Finance Minister Wolfgang Schaeuble when she made the remarks.

"Generally in any election year, the teams that provide the hypotheticals on which future deficits are forecast, err on the side of caution and assume that whatever is announced is not necessarily or inevitably going to happen," she said. Lagarde added that the UK authorities had managed to provide the right balance of spending cuts and revenue raising.