IMF Managing Director Christine Lagarde to Propose Approval in Principle of New Stand-By Arrangement for Greece

IMF News, June 15, 2017

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Canonical URL: IMF Managing Director Christine Lagarde to Propose Approval in Principle of New Stand-By Arrangement for Greece

Press Release No. 17/225
Date lines in source: "June 15, 2015" and "June 15, 2017"
Issued by: IMF Communications Department, MEDIA RELATIONS
Media contact phone: +1 202 623-7100
Media contact email: MEDIA@IMF.org
Media contacts named: Simonetta Nardin in Washington DC; Andreas Adriano in Luxembourg; media@imf.org

Managing Director Christine Lagarde announced her intention to propose to the IMF’s Executive Board the approval in principle (AIP) of a new IMF Stand-By Arrangement for Greece.
AIP would allow the IMF to be supportive of progress made on policies while making release of resources under the IMF arrangement conditional on Greece’s European creditors providing commitments for debt relief sufficient to secure debt sustainability.
AIP would be expected to involve a precautionary Stand-By Arrangement for a loan amount well below the IMF’s exceptional access threshold.
The IMF’s Executive Board will need to determine the specific modalities of AIP.

AIP supports the IMF’s long-held principle that any new program with Greece should be predicated on the “two legs” of policy reforms combined with debt relief.
Under AIP:
- Release of IMF funds would be contingent on policy implementation and receipt of debt relief assurances.
- Assessment of debt sustainability would be guided solely by the IMF’s own debt sustainability analysis.
The AIP procedure has precedent: it is used where there is agreement on policies underlying an IMF-supported program but full agreement between the member and its creditors on new financing or debt relief has not yet been reached.

Christine Lagarde stated that use of the AIP procedure will:
- Enable the IMF to leverage both reform and debt relief.
- Give confidence to creditors to disburse to Greece under the ESM program in July—thus reducing a potentially serious stress on the Greek economy.
- Give confidence to investors on the prospects for the Greek economy to grow and its people to prosper.
Lagarde expressed hope that discussion over specific debt relief measures can be brought to conclusion soon.

FAQs about Approval in Principle: http://www.imf.org/en/About/FAQ/approval-in-principle
The IMF and Greece: https://www.imf.org/external/country/GRC/
Press office contact details repeated: Phone +1 202 623-7100; Email MEDIA@IMF.org

IMF Press Release No. 17/225