May 27, 2011 / 4:11 PM / 8 years ago

IMF's Lipsky: no Greek debt restructuring foreseen

WASHINGTON (Reuters) - The International Monetary Fund’s acting chief, John Lipsky, said on Friday the programs put together by the fund and Europe to support Greece do not anticipate any debt restructuring.

“We are supporting an economic program developed by Greek authorities that does not contemplate debt restructuring,” Lipsky said in an interview with Reuters Insider from the Deauville, France, site of a Group of Eight summit.

Financial markets have been whipsawed by concerns about the Greek government’s ability to win support for severe austerity measures seen as necessary to reduce its debt load and to keep loan money flowing from a joint IMF and European Union lending package.

On Thursday, Jean-Claude Juncker, who chairs meetings of euro zone finance ministers, warned the IMF could withhold its contribution to an aid contribution Greece needs next month to pay its bills and service its massive debt.

On Friday, Greece’s Socialist Prime Minister George Papandreou failed to convince opposition leaders to support tougher austerity measures to free up EU/IMF aid needed to avert a debt default.

Lipsky had no comment on Juncker’s day-earlier remarks but insisted the EU/IMF support program didn’t foresee debt restructuring and noted IMF officials were in Athens “discussing policy performance with the Greek authorities.”


In fact, a mission from the so-called troika that includes the European Commission and the European Central Bank as well as the IMF is currently in Greece assessing how sustainable its debts are in the long run.

In a separate interview with CNBC television, Lipsky said talks also were under way with Egypt that will likely result in a substantial support program to help it stabilize its economy.

“We’re in discussions right now but it seems likely we would end up with a package of support for the Egyptian program that would include perhaps $3 billion to $4 billion of IMF aid out of an $11 billion to $12 billion package,” Lipsky said.

Lipsky said the IMF was carrying out its duties since the arrest of former Managing Director Dominique Strauss-Kahn and denied a suggestion that it had been destabilizing.

“Obviously, shock and concern; however, we have a highly disciplined and a highly talented set of staff members who are very focused on getting their job done,” he said. “We have big responsibilities but we’re concentrating on them.”

Strauss-Kahn is accused of sexually assaulting a hotel maid in New York on May 14, which he denies. He was head of the IMF and had been considered a contender in France’s presidential race until the incident took place.

Lipsky repeated that he was confident that, by June 30, the selection process will turn up a competent successor and said all the individuals so far named as contenders were “highly qualified individuals.”

Reporting by Glenn Somerville and Deborah Zabarenko; Additional reporting by Nicholas Vinocur in Deauville; Editing by Andrea Ricci

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