IMF welcomes Greek debt deal but has reservations on long-term

International Monetary Fund (IMF) Managing Director Christine Lagarde speaks at the Foreign Policy annual Awards Dinner in Washington, U.S., June 13, 2018. REUTERS/Yuri Gripas

LUXEMBOURG (Reuters) - The International Monetary Fund welcomed on Friday a deal on debt relief for Greece reached by Athens’ euro zone creditors saying it will improve debt sustainability in the medium term, but maintained reservations on the long term.

Euro zone finance ministers earlier on Friday offered Greece a 10-year deferral and maturities extension on a large part of past loans as well as 15 billion euros (£13.1 billion) in new credit to ensure Athens can stand on its own feet after it exits its third bailout in August.

“The additional debt relief measures announced today will mitigate Greece medium-term financing risks and improve medium term debt prospects,” the International Monetary Fund’s managing director Christine Lagarde told a news conference.

But she added that the fund will not join the expiring 86-billion-euro bailout as the time “has run out”, and maintained “reservations” on the long term sustainability of the Greek debt, which runs until 2060.

The fund will begin assessing the sustainability of the Greek debt “as early as next week”, Lagarde said, adding that the fund will remain engaged in Greece and will participate to the monitoring of the Greek economic performance and reforms after the end of the programme.

Reporting by Francesco Guarascio and Jan Strupczewski