June 3, 2011 / 10:28 AM / 9 years ago

IMF should force Greek restructuring - ex-director

LONDON, June 3 (Reuters) - The International Monetary Fund should push harder for Greece to restructure its debt and negotiate haircuts with bondholders rather than giving Athens more loans, according to the man who helped negotiate the IMF bailouts for Argentina and Uruguay.

Claudio Loser, a former director of the Western Hemisphere for the IMF, told Reuters Insider that Greece could also benefit from leaving the euro to get its house in order but added such a decision would create a serious problem for the single currency.

“Greece will have to take one or two of the two actions — restructuring with a haircut and maybe abandoning the euro, although I would say abandoning the euro will be more complicated,” Loser said.

A source close to negotiations told Reuters on Thursday that euro zone officials meeting in Vienna had agreed in principle to a new three-year programme for Greece to run until mid-2014, including some role for its private sector creditors.

The programme is expected to see Greece impose a deeper bout of austerity on its struggling economy and promise to speed up a privatisation drive in return for a new international bailout to avoid a debt default.

To watch the interview with Loser on Insider, click here link.reuters.com/tyh89r

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