MOSCOW (Sputnik) — Greece's international lenders must focus on debt relief for the indebted country instead of simply pushing ahead with contingency budget cuts and structural reforms, International Monetary Fund (IMF) Managing Director Christine Lagarde said on Friday.
"I think it is time for me to clarify our position, and to explain the reasons why we believe that specific measures, debt restructuring, and financing must now be discussed simultaneously… It is essential that the financing and debt relief from Greece’s European partners are based on fiscal targets that are realistic because they are supported by credible measures to reach them," Lagarde said in a letter, obtained and published by the Financial Times newspaper, which was addressed to the finance ministers of Eurozone countries.
In contrast to the Eurogroup's focus on contingency measures that involve narrow tax hikes and cuts to discretionary spending, Lagarde urged the ministers to also discuss debt relief for the beleaguered country.
The IMF chief also urged the Eurogroup to consider lowering its "unrealistic" target of 3.5 percent primary budget surplus, advocating a lower target of 1.5 percent, which would better correspond to the agreed 2.5 percent GDP budget cuts by 2018.
Under two previous bailout programs, the last of which expired on June 30, 2015, Greece received about $270 billion from the IMF, the ECB and Eurozone countries. The aid also came in exchange for austerity measures.