WASHINGTON, July 21 (KUNA) -- The International Monetary Fund (IMF) Executive Board approved in principle a USD 1.8 billion precautionary Stand-By Arrangement (SBA) for Greece, it was announced Thursday.
The IMF said in a statement that the arrangement "which supports the authorities' economic adjustment program, has been approved in principle, which means it will become effective only after the Fund receives specific and credible assurances from Greece's European partners to ensure debt sustainability, and provided that Greece's economic program remains on track." It added that "a second Executive Board decision is needed to make the arrangement effective," noting that the arrangement will expire on August 31, 2018, shortly after the expiration of the European Stability Mechanism program.
In this regard, IMF Managing Director Christine Lagarde said in a statement that she "strongly" welcomes Greece's new economic adjustment program, "which focuses on policies that will help restore medium-term macroeconomic stability and growth, and supports the authorities' efforts to return to market financing on a sustainable basis." She affirmed that the program "provides both breathing space to mobilize support for the deeper structural reforms that Greece needs to prosper within the euro area, and a framework for Greece's European partners to deliver further debt relief to restore Greece's debt sustainability." "As we have said many times, even with full program implementation, Greece will not be able to restore debt sustainability and needs further debt relief from its European partners," she remarked.
She added that she expects "a plan to restore debt sustainability to be agreed soon between Greece and its European partners." She stressed that "effectiveness of the new Stand-By Arrangement is contingent on this agreement on debt relief, as well as implementation of the program." (end) si.gta