IMF Welcomes Agreement to Tackle Eurozone Crisis

IMF welcomes comprehensive agreement to address Europe's sovereign debt crisis

‘Game-changing’ agreement on European financing commitment, improved loan terms for Greece, Portugal and Ireland

Greater flexibility for European Financial Stability Facility seen as key element

“What to me is critical—really a game-changing decision—is the leaders’ commitment and determination to provide support to countries until they have regained market access, provided that they successfully implement their programs. It means that the member states are committed to supporting other member states,” Lagarde said.

Helping Greece

The leaders of the 17 euro area countries have agreed to provide €109 billion in fresh financing for Greece. Together with voluntary contributions from the private sector and continued support from the IMF, this will close the financing gap in Greece’s budget and give the country the breathing room it needs to restore growth and competitiveness.

“What is critical to me is the fact that euro area member states have agreed to significantly improve the financing terms for Greece by extending the maturity of the loans and reducing the interest rates on loans granted by the EFSF going forward. That is clearly a major improvement,” she said.

Lagarde said the IMF remained committed to supporting Greece although she noted that no new request has yet been made for another IMF-supported program. “It is clearly the intention of the IMF to be an active participant in this program going forward, with a view to restoring growth, making sure that Greece can return to the market, and that there is a significant improvement of its debt sustainability,” she said.

Lagarde welcomed the agreement to involve the private sector through what European leaders are referring to as a “menu of options”, a step that is expected to provide €37 billion to the Greek rescue package.

European leaders also...