Bloomberg quotes Global Business and Economics Program Director Andrea Montanino on the International Monetary Fund’s push for debt restructuring in Greece:
That’s unlikely to satisfy the IMF, which has made debt relief its price of admission for joining the new rescue effort, said Andrea Montanino, a member of the fund’s executive board from 2012 to 2014. He said the IMF now needs euro-area officials to act, not just offer pledges similar to the currency zone’s November 2012 promise to ease Greece’s debt if certain conditions were met.
“The Europeans would prefer not to have a debt restructuring, for many reasons, particularly for political reasons,” said Montanino, now director of the Atlantic Council’s global business and economics program in Washington.
When Greece agreed to a 28-billion-euro loan program with the IMF in 2012, the loan documents said Greece would require “debt relief and long-term transfers from its European partners.” This commitment was essential to win the support of nations outside the euro area, said Montanino.
“Among Europeans, it was very clear this was just a political statement, nothing more,” he said. “There was never a real commitment, but the fund needed to include that sentence, otherwise the other countries would have not supported the program.”