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Even the IMF thinks that Greek debt is too high

Christine Lagarde has said that the country cannot restore debt sustainability “solely through its own actions”.

Head of the IMF Christine Lagarde
Head of the IMF Christine Lagarde
Image: AP Photo/Michel Euler

IMF CHIEF CHRISTINE Lagarde yesterday welcomed Europe’s decision to agree a new €86 billion bailout for Greece, but warned that Athens’ debt is still too high.

“I remain firmly of the view that Greece’s debt has become unsustainable and that Greece cannot restore debt sustainability solely through actions on its own,” she said.

And, while Lagarde called the agreement hammered out in Brussels “a very important step forward,” she warned it was too soon to say whether the IMF would provide funds to take part in the bailout.

“We look forward to working closely with Greece and its European partners in the coming months to put in place all the elements needed for me to recommend to the fund’s executive board to consider further financial support for Greece,” she said.

For this to be the case, she said, Greece’s European creditors would themselves have to provide “significant debt relief, well beyond what has been considered so far.”

Earlier Friday, Greek lawmakers passed the accord following a bitter all-night debate on the conditions demanded by Athens’ creditors which could alter many aspects of daily life.

Commission head Jean-Claude Juncker said six months of negotiations with the left-wing government of Prime Minister Alexis Tsipras — who won office in January opposed to the creditors’ demands — had been difficult and testing.

“Together, we have looked into the abyss. But today, I am glad to say that all sides have respected their commitments. Greece is living up to its ambitious reform commitments,” Juncker said in a statement.

- © AFP, 2015

Read: Why have we not heard anything about Greece for a while?

Also: Greece has reached a deal with its lenders. Here’s what it means

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