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Greece's debt requires restructuring: IMF

International Monetary Fund Managing Director Christine Lagarde speaks at Brookings Institute in Washington, DC, on July 8, 2015. (© AFP)

The managing director of the International Monetary Fund (IMF) has called for the restructuring of Greece’s massive debt as the cash-strapped country is trying to present a new proposal to its international creditors to avert an exit from the eurozone.

Christine Lagarde said Wednesday that a new program to prop up Athens' finances would require its international lenders to restructure debt.

“Greece is in a situation of acute crisis which needs to be tackled,” said Lagarde, who was addressing a conference in Washington.

She added that restructuring can help Greece to have “debt sustainability.”

Lagarde said the fund “remains fully engaged” with Greece to help find a solution to the country’s crisis.

Greece has already defaulted on a €1.5-billion debt payment to the IMF, which, together with the European Commission and the European Central Bank, forms the troika of Greece’s international lenders.

People queue at a bank's ATM while others speak to an official of the bank, in Athens, Greece, on July 6, 2015. (© AFP)

Meanwhile, the Greek Finance Ministry has said the country’s banks will remain closed until Monday.

The withdrawal cap of €60 ($67) per day from ATM machines will also remain in force.

The development comes as Athens has been trying to come up with a new proposal to present to its international lenders in a last-minute drive to prevent a eurozone exit.

Greece faces a Thursday deadline to present the detailed plan on the bailout deal with its creditors before a European Union summit Sunday. The deadline had earlier been set on July 2 by European Council President Donald Tusk.

On Wednesday, Greek Prime Minister Alexis Tsipras said that his government will submit to its creditors on Thursday a “credible reform” plan, which reportedly focuses on pension and tax reforms.

Greek Prime Minister Alexis Tsipras (© AFP) 

He also expressed confidence that his debt-ridden country would meet an end-of-the-week deadline set by eurozone leaders to reach a bailout deal or risk leaving the euro.

The Greek premier, however, said that Greece would sign a deal with its international lenders in the hope of a definitive end to Greece's protracted financial crisis.

Greece received two bailout packages in 2010 and 2012, worth a total of €240 billion ($272 billion) from its creditors following its 2009 economic crisis. In return for the bailouts, Athens committed itself to implementing harsh austerity measures, which triggered public outcry.


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