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Europe should act to reduce Greece debt: IMF

The International Monetary Fund (IMF) has suggested that Europe should act to reduce Greece's debt, insisting the Fund itself was not prepared to contribute more to the country's bailout.

twitter-logo PTI   Washington     Last Updated: November 16, 2012  | 09:42 IST

The International Monetary Fund (IMF) on Thursday suggested that Europe should act to reduce Greece's debt , insisting the Fund itself was not prepared to contribute more to the country's bailout.

The IMF has already extended Greece's loan to four years from three years and lowered interest rates, IMF spokesman Bill Murray said at a regularly scheduled news briefing.

"That's the IMF contribution," he said.

Asked what Europe should do to reduce Greek debt, Murray declined to give specifics, but said: "Presumably, that's who has to take the action."

IMF managing director Christine Lagarde was cutting short her Asia trip to attend a Eurozone finance ministers meeting on the Greek crisis on Tuesday in Brussels, he said.

The IMF and the European Union are at odds over how to address Greece's debt mountain and an official sector writedown is one of the options on the table.

On Monday Eurogroup president Jean-Claude Juncker and Lagarde clashed openly on a key debt target in the bailout program.

Speaking after a Eurozone finance ministers meeting in Brussels, Juncker said the country's debt target of 120 per cent of gross domestic product should be put back two years to 2022. The current level is 170 per cent.

Lagarde told the same news conference she believed the target should remain at 2020, the original date in the second bailout agreed earlier this year.

Murray reiterated that formula - "120 by 2020" - and stressed that the IMF was in "ongoing, active consultations with our partners."

"To get Greece back on a path of growth and job creation... you have to lower its debt-to-GDP ratio in a significant way," he said.

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