IMF’s Christine Lagarde Backs More Time For Greece

The International Monetary Fund (IMF) head, Christine Lagarde, has backed calls for Greece to have more time to meet the targets of its bailout.

She said in a BBC debate held in Tokyo that this might be better than “frontloading heavily”, or making Greece pay the most upfront.

But the biggest contributor to Greece’s bailouts, Germany, rebuffed the idea.

“We have to stick to what we announced,” Germany’s Finance Minister Wolfgang Schaeuble replied.

Greece has asked for two more years to meet the spending cuts demanded by its lenders, which include the eurozone countries through its bailout funds and also the IMF.

Ms Lagarde backed the calls, but Mr Schaeuble stuck to Germany’s previous line that on the terms of the 130bn-euro (£105bn; $168bn) bailout – Greece’s second since 2010 – Athens must be held to what it agreed.

“I think it’s even more important for sustainable growth that investors and consumers have some confidence,” he said.

“We have to stick to what we announced and we have to implement it step by step.”

Greece has argued that it has been through five years of recession already and, with shrinking tax revenues, cannot hope to meet its targets through cuts alone.

The IMF boss also took a more nuanced approached to austerity – the spending cuts demanded by lenders that have seen several heads of government in Europe ousted and violent street protests from Athens to Madrid.

“If people stay away from the job market, they lose hope,” Ms Lagarde said, “which is why it’s critical that while maintaining those policies of fiscal consolidation where these are needed, there is also concern for growth, so that jobs can be created.

“But it’s a factor of pace. You know, at which pace does it happen?”