Germany opposes IMF on giving Greece more time to repay loans

Germany would not support the idea of the International Monetary Fund (IMF) Managing Director Dominique Strauss-Kahn that Greece could get more time to repay a bailout from the European Union and IMF, German Finance Ministry said Monday.

Finance Ministry spokesman Michael Offer said at a regular government press conference that the rules which had been set up for Greece by the European Central Bank (ECB), the EU Commission and the IMF should be executed.

Another ministry spokesman Bertrand Benoit said in a telephone interview with Bloomberg that Germany was not in favor of extending the repayment schedule and any such step would be too premature as Greece had to show its deficit-reduction program would be implemented strictly.

German Finance Ministry’s statements followed remarks by Strauss-Kahn that the IMF was ready to extend the repayment periods for loans granted to Greece if European nations decided to do so first. The IMF said other options included replacing shorter- term with longer-term loans and agreeing to a new program if markets’concern continued.

A 110-billion-euro rescue package was agreed by the European Union and the IMF earlier this year to help pull Greece back from brink of bankruptcy. The financial lifeline had a three-year term and forced Greece to cut its budget deficit below 3 percent of gross domestic product by the end of 2014.

Both IMF and German Finance Ministry were said to be optimistic that Greece was progressing well on the right path to rein in spending and meet the benchmarks set out as a condition of bailout aid.

The IMF’s willingness to extend bailout loans revived investors’confidence and credit-default swaps on Greece fell to the lowest level in four months.

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