IMF Communications Director Gerry Rice said the Greek debt can remain sustainable without a ‘haircut’. Speaking in Washington Rice pointed out that a GDP primary surplus of 3.5% over an extended period was an unrealistic target. He claimed the debt of Greece could be managed through providing a long grace period on existing bonds and a decrease in interest rate payments.

Rice continued by saying that the IMF had already made a an assessment of how viable the Greek debt was, adding that the Europeans were informed. ‘We have a good relationship with the Europeans. Our talks are pro-active. We are fully committed to working for the good of Greece’, he said.

He clarified that the IMF was examining ways to stay on board the Greek program under the condition that realistic fiscal targets were set and a substantial debt reduction was achieved. Rice said the IMF would table its proposals on the necessary reforms and the Greek debt during next week’s May 24 Eurogroup meeting.