The International Monetary Fund on Saturday denied a report in German magazine Der Spiegel that it was privately pressing Greece to restructure its debt. "As we have said consistently, the IMF supports the Greek government's position of no debt restructuring and its determination to fully service its debt obligations. Any reports claiming otherwise are wrong," an IMF spokeswoman told Reuters.
Without citing any sources, Der Spiegel reported that the IMF had reversed its previous opposition to the idea of a Greek restructuring and now believed one was necessary soon. It wrote that senior IMF officials were recommending this to European governments because Greece's debt mountain was now roughly one-and-a-half times its annual economic output.
Early in March, IMF European Director Antonio Borges told reporters he was "confident that Greek debt is sustainable", adding that the Greeks had made "quite a bit of progress on their banks" as well. But since the IMF now believes current measures no longer suffice, it would like to see interest rates on Greek sovereign debt lowered, maturities extended or the amount of principal which Greece has to repay cut, Der Spiegel said.
European governments and the IMF are jointly contributing to and administering Greece's 110 billion euro ($155 billion) bailout, so a split between them on policy could be damaging to Greece's prospects for recovery. Greek and European officials have long insisted that Greece can recover without restructuring its debt, and that even discussing a restructuring now would be counter-productive by damaging banks across Europe and causing panic in markets.
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