IMF head disagrees with German Finance Minister Wolfgang Schauble

Lagarde says only debt reduction along with reforms can help economic recovery in Greece

IMF Director Christine Lagarde called for a restructuring of the Greek debt and reforms in the economy during a speech in Washington, Monday in order for the organisation to support the bailout program. The IMF’s head sent a message to the Europeans, and esepcially German Finance Minister Wolfgang Schauble that the only way it would commit to the Greek program would be with a debt haircut accompanied by reforms in the pension and tax system. Responding to a question by Greek journalist Michalis Ignatiou, Mrs. Lagarde said the she disagreed with Mr. Schauble that Greece’s problem was related to lack of productivity, but rather to debt relief. “We at the IMF believe Greece should have the least debt possible on her shoulders and support its restructuring to a degree that would make it sustainable”, she pointed out. She went on to stress that only structural reforms would have a long-term effect and aid in the economic recovery of Greece, which would release prospects of productivity to aid Greece move forward and exit the crisis. Mrs. Lagarde did not rule out the participation of the Fund in the Greek program, but only under the condition of a debt haircut and reforms.