Lagarde: No grace for Greece on repayment delay | Business| Economy and finance news from a German perspective | DW | 16.04.2015
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Lagarde: No grace for Greece on repayment delay

International Monetary Fund chief Christine Lagarde has rebuffed talk of Greece obtaining a delay on its debt payments to the Fund. Her remarks came at a meeting with the World Bank in Washington.

The IMF chief did her best to puncture Greece's hope's at the meeting in Washington.

"It's clearly not a course of action that would actually fit," she said to reporters' questions on Greece, adding: "We have never had an advanced economy ask for payment delays."

Lagarde said a Greek delay on its repayments to the Fund would not be recommended in the current situation.

Greece is struggling with a tight liquidity situation while it negotiates with its foreign creditors.

In its update of global prospects this week, the IMF stuck to its forecast of "subdued" growth of 3.5 percent this year, picking up to 3.8 percent in 2016.

But IMF chief economist Olivier Blanchard warned that countries need to commit more effort to investments, especially in infrastructure, and implement market-opening reforms to increase output faster.

"It would be wrong to speak, as some have done, of stagnation, but prospects are more subdued," he said. "And more subdued prospects lead, in turn, to lower spending and lower growth."

Progress on finding a solution to Greece's financial woes has not been satisfactory, the European Commission warned Thursday, a week before eurozone finance ministers are due to tackle the issue.

"We continue to work with the other institutions and the Greek authorities. Talks are ongoing. However, at this stage, we are not satisfied with the level of progress made so far," said Margaritis Schinas, a spokesman for the European Union's executive.

More warnings

Lagarde and her World Bank counterpart Jim Yong Kim have already warned middle and low-income countries that they face more financial turbulence ahead, as the US Federal Reserve tightens up monetary policy with fresh interest rate hikes later this year.

But Kim will also try to keep the focus on fighting extreme poverty, and is planning a new fundraising effort for long-term relief and rebuilding for the three West African countries savaged by the Ebola epidemic, Guinea, Liberia and Sierra Leone.

After the World Bank, the IMF and individual governments threw in hundreds of millions of dollars to confront the outbreak last year, Ebola is now mostly under control, though with a toll of more than 10,000 dead.

Oxfam International is urging the World Bank to raise $1.7 billion to help countries hit by the epidemic to improve their sanitary infrastructure.

Longer-term efforts are needed to build the capacities of the health care systems in each country to prevent a future outbreak, said Oxfam's Washington office chief Nicolas Mombrial.

"If you don't do anything, it will happen again," he added.

bk/pad (AFP, Reuters, dpa)

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