Greece's debt requires restructuring: IMF
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.
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.
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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