WSJ: Lagarde's doubts on the Greek debt

WSJ: Lagarde's doubts on the Greek debt

Extensive reference on yesterday's statement from Christine Lagarde on the Greek debt and her doubts on the need of assistance from foreign creditors, was made in an article published by Wall Street Journal.

WSJ notes that "the head of the International Monetary Fund doubts if Greece still needs debt relief.

The review of the status of the Greek economy over the coming weeks will determine whether the rest of the Greek debt is sustainable without the contribution of international creditors".

The report also states that "senior IMF officials have repeatedly stated over the last two years that the Greek debt levels are too high and may overburden the fragile economy of Greece, if some sort of relief isn't implemented.

IMF mentioned a earlier promise of the EU to contribute to the Greek debt a haircut level well below 110% of its GDP, if Greece applied its loan terms. However, yesterday, the general director of the IMF, Christine Lagarde, said it was too early to prejudge the final analysis on the sustainability of Greek debt".

It also writes: "At the same time, it's uncertain whether IMF will soften its stance on the need for the Greek haircut on the debt under pressure from the EU, which is reluctant to offer the country bonds with favorable terms or if IMF will simply try to emphasize that any decision on a possible haircut will be based on a detailed process".

Finally, the American newspaper notes that "although Greece has made one of the biggest budgetary adjustments in modern economic history, it still struggles to implement the objectives of its loan program. Even now, Lagarde said that the objectives on the budget, which are crucial for reducing the debt, are very ambitious.

As youth unemployment remains above 50% and requires the application of increased economic changes in order to meet the country in loan obligations, many economists wonder whether the restrictions on the political life of the country will continue to hamper future reforms".

In another article of WSJ, it's reported that "the agreement of Troika for a meeting abroad is perceived as a sign of confidence that the austerity program is on track and the pressure test and the crisis of the country have eased". As highlighted "according to the Greek government representative, Sophia Voultepsi, changing the meeting place was a request of the Prime Minister, Antonis Samaras, who believes that the regular visits of inspectors of troika to the Greek capital are disruptive".

It also cites a statement of Voultepsi to the television station Mega: "Since we are on the right track and the program progresses well, there is no need for their physical presence here". Among other things, it states that "in some cases, negotiations are progressing slowly for months and are covered extensively by the Greek media, whose reports on possible new cuts or austerity measures sometimes affect the economic sentiment".