IMF: Greek crisis risks remain

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IMF: Greek crisis risks remain

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A mixed response from the International Monetary Fund to the debt deal between Greece and its creditors.

The IMF’s director of external relations Gerry Rice said they were hopeful, but still worried about the risks in Athens implementing what he called “a difficult package” of reforms.

“It’s a strong package but it’s contingent on implementation and there are risks,” Rice told reporters at a news conference in Washington.

He added: “Greece is still in recession and facing a very difficult, challenging economic environment. Our current projection is that the recession would bottom out some time next year, based on our assumptions that Greece, in the medium term, would return to a realistic growth path.”

Rice said the extent of any additional IMF help for Greece had yet to be determined and it has not been discussed by the Fund’s board.

In Berlin, a senior official of Chancellor Angela Merkel’s ruling Christian Democrats said lawmakers due to vote on the bailout on Monday would make it dependent on the International Monetary Fund taking part as planned.

In an interview with the Wall Street Journal, European Central Bank President Mario Draghi suggested the muted market response to Tuesday’s rescue deal suggested many doubted Athens would follow through on a promised austerity cure. “It’s hard to say if the crisis is over,” he warned.

If the IMF is right and Greece’s recession does not bottom out until sometime next year, it would be one of the most prolonged downturns in modern history.