Press Release: Statement by IMF Managing Director Christine Lagarde on Greece
IMF News, March 9, 2012
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- Published: March 9, 2012
Key announcement
- Managing Director Christine Lagarde announced consultation with the IMF’s Executive Board and stated: “I intend to recommend a €28 billion (about US$36.7 billion) arrangement under the Fund’s Extended Fund Facility (EFF) to support Greece’s ambitious economic program over the next four years.”
- Press Release No. 12/72
- Date: March 9, 2012
Rationale and scope of IMF support
- The proposed €28 billion (about US$36.7 billion) EFF arrangement is intended to support Greece’s economic program over the next four years.
- The scale and length of the Fund’s support are described as commensurate with:
- “the long-term nature of the challenges facing Greece”
- “the significant financial contributions provided by the private sector and by Euro Area member states.”
- The decision to recommend continued IMF assistance is framed as reflecting “our determination to remain engaged.”
Structural reforms and objectives
- Restoring competitiveness and a sustainable fiscal position will require Greece to “undertake sustained and deep structural reforms over a prolonged period.”
- The Fund’s continued support is presented as part of a multi-party effort to:
- Reduce Greece’s medium-term financing needs via private sector participation in a debt exchange offer.
- Contribute to debt sustainability.
- Help the Greek people overcome the crisis and “over time restore growth,” thereby contributing to broader global financial stability.
Role of stakeholders and conditionality
- The integrated package envisaged involves coordinated roles for:
- The Greek government
- European partners
- The private sector (noted for participating in the debt exchange offer)
- The Fund
- The statement welcomes “the cooperation of the private sector in participating in the debt exchange offer by the Greek authorities,” calling it “an important step” that will “dramatically reduce Greece’s medium-term financing needs.”
Next steps
- Christine Lagarde: “I will put this proposal to the IMF’s Executive Board next week for review.”
Press Release No. 12/72 — March 9, 2012.