The world’s leaders are making headlines in Davos at the annual World Economic Forum but none more than the announcement today that the International Monetary Fund is demanding debt relief for Greece, if it is to participate in the country’s third bail out that was negotiated this summer.
In basic terms— if the Eurozone wants the IMF involved, it would only do so if Greece’s debts are written down.
The IMF is already a participant in Greece’s first two bail outs but expressed concern about the country’s ability to grow, given that debts are too burdensome and will prevent a lasting economy.
The IMF’s managing director Christine Lagarde met with Greek prime minister Alexis Tsipras where the two discussed the matter plaguing all of the parties involved— that is Greece’s ability to pay back its crippling debt that was forced on the country at tough negotiations this past summer.
In an official statement, the IMF said:
“The managing director reiterated that the IMF stands ready to continue to support Greece in achieving robust economic growth and sustainable public finances through a credible and comprehensive medium-term economic programme. Such a programme would require strong economic policies, not least pension reforms as well as significant debt relief from Greece’s European partners to ensure that debt is on a sustainable downward trajectory.”