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IMF official: Greece can extend loan repayment period; radical reforms necessary

Δημοσίευση 29 Νοεμβρίου 2010, 10:01 / Ανανεώθηκε 27 Ιουνίου 2013, 14:55
IMF official: Greece can extend loan repayment period; radical reforms necessary
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The International Monetary Fund (IMF) representative in the EU-ECB-IMF 'troika' overseeing the 110-billion-euro support mechanism for Greece and the chief negotiator vis-à-vis the Greek government, Poul Thomsen, was quoted here on Sunday as emphasising that "next year (2011) will be the most critical and painful, given that structural changes will have to take place."

The International Monetary Fund (IMF) representative in the EU-ECB-IMF 'troika' overseeing the 110-billion-euro support mechanism for Greece and the chief negotiator vis-à-vis the Greek government, Poul Thomsen, was quoted here on Sunday as emphasising that "next year (2011) will be the most critical and painful, given that structural changes will have to take place."

Thomsen, amongst others, said the situation in Greece's wider public sector cannot continue as is.

"The time for radical structural reforms ... the public sector must be curtailed; there have to be radical reforms in the healthcare sector and in improvement of the tax collecting mechanism's operation," he was quoted as saying in an interview published by the weekly "Real News".

Moreover, Thomsen said the IMF has the ability to extend the repayment period for loans issued within the memorandum's framework, from six to 11 years, in case the government fails to proceed with "deep and radical" reforms in 2011.

Asked about swirling press speculation over a Greek "debt restructuring", Thomsen clarified that this "is not a solution ... Greece's major problem is not the level of the debt, but a lack of competitiveness."

He also expressed a conviction the benefits resulting from whatever debt restructuring will, in the long term, be much less than the costs and negative developments.

Asked if the fourth tranche of a loan to Greece is threatened with delay, Thomsen replied that this depends on how the government deals with the structural problems he just listed.

Moreover, when asked if he would invest in Greece if he headed up a multinational, Thomsen answered in the affirmative, stressing "I have confidence in the country ... the right time to invest is when others don't want to invest; I would do it (invest) now".

Finally, Thomsen estimated that the first signs of an economic recovery in Greece will come at the end of 2011.