IMF Chief Says No Need in 'Haircut' of Greek Debt

The International Monetary Fund (IMF) Managing Director Christine Lagarde said on Friday that there is no need in reduction of the nominal value of Greece's debt or so-called haircut.

BRUSSELS (Sputnik) – Earlier in the day, Klaus Regling, the managing director of the European Stability Mechanism (ESM), said that Eurogroup finance ministers rejected to cut the nominal value of Athens' debt.

"I consider that there is no need in 'haircut,' this means that there is no need to change the nominal value of the debt," Lagarde said at a press conference.

He added that a thorough analysis of Greece's debt would lead to the mechanism possibly without a "haircut," but with possible re-profiling of the debt.

Greece's international creditors, including the IMF, the European Central Bank and several EU countries, signed an agreement with Athens in August 2015, approving a third bailout package worth about 86 billion euros ($96.9 billion at the current exchange rates) in exchange for highly unpopular austerity reforms such as pension cuts and tax hikes.

The Greek economy has been severely strained for several years due to the country’s multibillion-euro debt, accumulated after the 2008 world financial crisis. The haircut has been repeatedly proposed as a measure to relief Athens' debt burden and to ensure stable debt repayment.