World Economy

Greece’s Total Debt Cancellation Not an Option

Greece’s Total Debt Cancellation Not an OptionGreece’s Total Debt Cancellation Not an Option

International Monetary Fund Managing Director Christine Lagarde stressed out that there is an urgent need for cash-strapped Greece’s unsustainable debt burden to be reconstructed.

In an interview with Swiss French-language daily newspaper “Le Temps” on Saturday, Lagarde implied that the International Monetary Fund is on the same page with Greece’s international creditors regarding the debt reconstructing issue, ruling out, any possibility for a write-off, NewsNow reported.

“The debate on the debt cancellation was never opened. I do not think it is necessary to open it things go well,” Lagarde stated.

The Chief of the IMF also added: “There are talks about extending maturities, reducing rates for a certain period of time. We are not talking about canceling debt.”

However, Lagarde as the representative of one of Greece’s main international lenders did not provide any information about IMF’s intention to participate in Greece’s third €86 billion bailout program.

Meanwhile,the head of the European Stability Mechanism said last Thursday that options for easing Greece’s debt burden included extending loan maturities, suspending interest payments and transferring central bank profits, but he ruled out a debt “haircut”, Reuters reported.

Klaus Regling, head of the ESM bailout fund, told a news conference in Berlin that another election in Greece was increasing uncertainty. But “overall, I’m confident,” he said, adding that he expects support for the bailout to grow in Athens. “There has been a large majority in Greece’s parliament for these reforms.” On Wednesday, outgoing Greek Prime Minister Alexis Tsipras, who hopes to return to power with an absolute majority, told Alpha TV that he favored longer repayment periods and lower interest rates on Greece’s debt burden.